It seems that the consolidation of the CPO market has come to an end just a week after our previous update last Monday. The relevant paragraph from that review reads: ”…the price action on 18 Nov 2010 could potentially be a reversal signal for the recent consolidation phase. We have drawn a dotted downtrend line in the above daily chart. A break above this trend line would signal the end of the price consolidation and also confirm the market’s intention to stay above the RM3,000 / tonne mark, as indicated by the impressive rebound from the day-low of 18 Nov 2010.”
With the short-term downtrend line being violated on Monday coupled with yesterday’s aggressive price appreciation, the odds are high that the market would soon take out the recent high of RM3,452 /tonne.
Both near-term and mid-term technical outlooks of the CPO market will remain bullish as long as prices stay above the RM2,700-RM2,800 / tonne area. The fast appreciation of CPO prices since October this year basically reaffirms our view that the breakout from the RM2,800 / tonne level had substantially improved the futures market’s technical landscape.
From the current level, there is immediate resistance at the recent high of RM3,452 / tonne while the next very tough resistance for the CPO market is seen at the RM3,750 / tonne level. On the downside, there is initial support at the RM3,114 / tonne level, followed by the psychological RM3,000-mark.
With the short-term downtrend line being violated on Monday coupled with yesterday’s aggressive price appreciation, the odds are high that the market would soon take out the recent high of RM3,452 /tonne.
Both near-term and mid-term technical outlooks of the CPO market will remain bullish as long as prices stay above the RM2,700-RM2,800 / tonne area. The fast appreciation of CPO prices since October this year basically reaffirms our view that the breakout from the RM2,800 / tonne level had substantially improved the futures market’s technical landscape.
From the current level, there is immediate resistance at the recent high of RM3,452 / tonne while the next very tough resistance for the CPO market is seen at the RM3,750 / tonne level. On the downside, there is initial support at the RM3,114 / tonne level, followed by the psychological RM3,000-mark.
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