WHERE TO NOW FOR WATER PRICES?

Last week we pointed out the key support at $390 which if broken could see a test of support at $345 and $280 and rising. These two charts, now updated, showing how this scenario has pointed out. Support is now at $282 and $287 and still rising.

Weekly volume adjusted price held the support at $345. However, the market is currently trading below that.

As seasonal strength dissipates there is long term pressure on the market as show in the weekly chart.

Please refer to last weeks comments on long term pressure on the market. Also see last weeks chart below:

We now present the chart for the daily prices for the week ending 27th September - demonstrating the continued support just below $290:

As we can see from the red and yellow lines, the support is as suggested at $287 and $282, with these lines rising. We have of course seen the price move down in the past 1o days with good rainfall in the catchments.

In summary:

· Many charts point to very strong support at around $280.

· We are still in the seasonal strong period.

· So far no evidence that there is more water accumulated this year in MDB than last year.

· Nonetheless authorities have increased comparative allocations.

· Some reasonable rain has added to bearish sentiment.

· So far the only new factor that is proven is the reduced price of feed for dairy.

· The market would appear more likely to go up $100-200/ML from here than down by even half that amount. Good point to buy; not a great point to sell.

In closing, the weekly chart:


Just click on the chart to obtain a larger image!