Things continued to turn out as expected after the CPO market experienced the most important technical breakout since December 2008 after violating the massive “Ascending Triangle”. To re-cap, the market had previously experienced no less than seven failed breakout attempts at the resistance line of the “Ascending Triangle”, which was not taken out until last month.
CPO prices have been rallying aggressively since breaking above the “Ascending Triangle”. Not surprisingly, the futures market was stuck at around the RM2,000-RM2,800 / tonne level for more than a year and a break above such a long period of consolidation would normally lead to aggressive price action.
The fast appreciation of CPO prices over the last 3 weeks or so basically reaffirms our view that the breakout from the RM2,800 / tonne level had substantially improved the futures market’s technical landscape. Both near-term and mid-term technical outlooks of the CPO market are now aligned with a bullish bias.
The next very tough resistance for the CPO market is situated at the RM3,750 / tonne level. To the downside, there is initial strong support at the RM3,191-RM3,296 / tonne gap created two days ago. Another support is situated at the RM3,112 / tonne level.
CPO prices have been rallying aggressively since breaking above the “Ascending Triangle”. Not surprisingly, the futures market was stuck at around the RM2,000-RM2,800 / tonne level for more than a year and a break above such a long period of consolidation would normally lead to aggressive price action.
The fast appreciation of CPO prices over the last 3 weeks or so basically reaffirms our view that the breakout from the RM2,800 / tonne level had substantially improved the futures market’s technical landscape. Both near-term and mid-term technical outlooks of the CPO market are now aligned with a bullish bias.
The next very tough resistance for the CPO market is situated at the RM3,750 / tonne level. To the downside, there is initial strong support at the RM3,191-RM3,296 / tonne gap created two days ago. Another support is situated at the RM3,112 / tonne level.
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