The RM3,750 / tonne level has been our major talking point for the last few months. This is because whether or not CPO price breaks and sustains above this level will determine its near-term outlook. Since two years ago, after CPO prices tumbled sharply in 1Q08, there have been four major failed rebound attempts to go back and hold above the RM3,750 / tonne level in the subsequent 4 months. Interestingly, the market experienced its fifth failed breakout attempt at the RM3,750 / tonne level last month.
The market is now trying to decisively take away this formidable RM3,750 / tonne level for the sixth time since 2008. This time, unlike all the previous failed attempts, it looks like the market has better odds. This is because it has exhibited strong conviction of not violating the recent low of RM3,610 / tonne level on 26 Jan. As a result, a mini “Double Bottom” was constructed and this
reversal signal also appears right above the uptrend line extending from the major breakout point situated at the RM2,800 / tonne level.
As the market continues to trend higher along the uptrend line, coupled with the formation of the mini “Double Bottom”, we maintain our bullish view towards the near-term CPO prices.
If the RM3,750 / tonne level is decisively violated, immediate resistance lies at the RM3,905 / tonne level, followed by the RM4,000 / tonne level. To the downside, immediate support is seen at the RM3,610 / tonne level, followed by RM3,471 / tonne.
The market is now trying to decisively take away this formidable RM3,750 / tonne level for the sixth time since 2008. This time, unlike all the previous failed attempts, it looks like the market has better odds. This is because it has exhibited strong conviction of not violating the recent low of RM3,610 / tonne level on 26 Jan. As a result, a mini “Double Bottom” was constructed and this
reversal signal also appears right above the uptrend line extending from the major breakout point situated at the RM2,800 / tonne level.
As the market continues to trend higher along the uptrend line, coupled with the formation of the mini “Double Bottom”, we maintain our bullish view towards the near-term CPO prices.
If the RM3,750 / tonne level is decisively violated, immediate resistance lies at the RM3,905 / tonne level, followed by the RM4,000 / tonne level. To the downside, immediate support is seen at the RM3,610 / tonne level, followed by RM3,471 / tonne.
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