Palm oil prices have been consolidating since creating the “non classical Hammer” last Thursday. Nevertheless, prices are consolidating within the potential downtrend channel. We shall see if CPO prices will continue to consolidate sideways and eventually lead to a shift in the current downtrend to a sideways trend, or even to a new uptrend.
Until then, it still looks like the market is in the midst of building a downtrend channel. Although it did not create another major lower low last Thursday after successfully holding up the RM3,250 / tonne level, it is still vulnerable to a further pullback, possibility to the 200-day MAV line, if it remains stuck within the downtrend channel.
We are sticking to our view that the uptrend which started since the mid-term downtrend line was violated in October last year has ended. We had shifted our view to bearish following the breakdown, which was our first change in view since October last year. It was evident as the RM124/tonne “downside gap” created on 23 Feb 2010 had violated the CPO market’s more than 6- month solid uptrend. Prices are expected to continue trending lower until the downtrend line is violated.
Immediate support is now seen at RM3,250 / tonne level, followed by the 3,000/tonne psychological mark. Another strong support is seen at the 200-day MAV line, which now lies at the RM3,086 / tonne level. To the upside, immediate resistance lies at the RM3,489 / tonne level, followed by the RM3,700 / tonne level.
Until then, it still looks like the market is in the midst of building a downtrend channel. Although it did not create another major lower low last Thursday after successfully holding up the RM3,250 / tonne level, it is still vulnerable to a further pullback, possibility to the 200-day MAV line, if it remains stuck within the downtrend channel.
We are sticking to our view that the uptrend which started since the mid-term downtrend line was violated in October last year has ended. We had shifted our view to bearish following the breakdown, which was our first change in view since October last year. It was evident as the RM124/tonne “downside gap” created on 23 Feb 2010 had violated the CPO market’s more than 6- month solid uptrend. Prices are expected to continue trending lower until the downtrend line is violated.
Immediate support is now seen at RM3,250 / tonne level, followed by the 3,000/tonne psychological mark. Another strong support is seen at the 200-day MAV line, which now lies at the RM3,086 / tonne level. To the upside, immediate resistance lies at the RM3,489 / tonne level, followed by the RM3,700 / tonne level.
