Closed lower and tested key point (Nov.3, 2005)
Author:
admin
PublishDate:
2005-11-03 17:03:00
Hit:
555
The action of the electronic market was within the rational expectation of the participants. After the previous legs of hike and consecutive movement at high levels, price continued the weak correction beginning from last Friday. With enlarged trading volume, sellers dragged prices down to 230000 yuan for Nov. raw silk and 70000 yuan for March’06 dried cocoon today. The market is testing key point.
As far as the electronic market goes, the sharply drop from last weekend has disrupted the sideways movement. Sellers in last week have made money right now, while those were caught at highs should set strict sell stops and implement them. Otherwise, loss will be even larger.
The sharply fall was partly because of its comparatively significant rise during the previous rally. To the buyers, resistance was huge at around 230000 yuan for raw silk and 70000 yuan for dried cocoon today. Buyer should stand firmly above the level by taking advantage of current good spot situation. Otherwise, the inflow of new selling capitals will pull back prices.
Change Open-close prices Net position
Raw Silk for Nov. 2005 -1200yuan/ton 231800---230600 464
Raw silk for March 2006 -3600yuan/ton 227000---223400 2398
Dried Cocoon for Nov. 2005 -1300yuan/ton 75300---74000 36
Dried Cocoon for March 2006 -400yuan/ton 71000---70600 4728
In spot market, most areas kept stable. But the electronic price movement in the coming days will be tightly linked to spot reaction