Previously, we had betted on the formidable RM3,750 / tonne level putting a stop to the CPO prices’ rapid rise, at least temporarily. This is because the RM3,750/tonne level was a meaningful level. After CPO prices tumbled sharply in 1Q08, there were actually four major failed rebound attempts at the RM3,750/tonne level in the 4 months that followed. As a result, the RM3,750 became a very tough resistance.
Nevertheless, CPO prices are now trading above the RM3,750 / tonne level. We believe the short consolidation phase in the middle of November helped to propel CPO prices beyond the significant RM3,750 / tonne level with ease.
The prices continued to rally furiously after the consolidation in mid-November. The aggressive price action we are seeing now is basically the extension of the uptrend that started since the market staged a major breakout from the “Ascending Triangle” in October.
We had said before that the breakout from the RM2,800/tonne level, which coincided with the breakout from the “Ascending Triangle”, had substantially improved the CPO futures’ technical landscape. The mid-term technical outlooks of the CPO market will remain bullish as long as prices stay above the RM2,700- RM2,800/tonne area. As far as the nearer-term outlook is concerned, we have drawn a new short-term uptrend line in the above daily chart to provide guidance. Using this trend line as guidance, we know the near-term technical outlook of the market will remain bullish as long as it continues to extend its uptrend above the line.
From the current level, the RM4,400 / tonne level is the next resistance while additional resistance is seen at the RM4,154 / tonne level. To the downside, we are eyeing the RM3,750 / tonne level as the immediate support while next support is seen at the RM3,471 / tonne level.
Nevertheless, CPO prices are now trading above the RM3,750 / tonne level. We believe the short consolidation phase in the middle of November helped to propel CPO prices beyond the significant RM3,750 / tonne level with ease.
The prices continued to rally furiously after the consolidation in mid-November. The aggressive price action we are seeing now is basically the extension of the uptrend that started since the market staged a major breakout from the “Ascending Triangle” in October.
We had said before that the breakout from the RM2,800/tonne level, which coincided with the breakout from the “Ascending Triangle”, had substantially improved the CPO futures’ technical landscape. The mid-term technical outlooks of the CPO market will remain bullish as long as prices stay above the RM2,700- RM2,800/tonne area. As far as the nearer-term outlook is concerned, we have drawn a new short-term uptrend line in the above daily chart to provide guidance. Using this trend line as guidance, we know the near-term technical outlook of the market will remain bullish as long as it continues to extend its uptrend above the line.
From the current level, the RM4,400 / tonne level is the next resistance while additional resistance is seen at the RM4,154 / tonne level. To the downside, we are eyeing the RM3,750 / tonne level as the immediate support while next support is seen at the RM3,471 / tonne level.
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