Monday, May 9, 2011

Future Crude Palm Oil, FCPO – Near Term Weakness To Retest RM3000 Support.

Commodity to watch – FCPO, Future Crude Palm Oil.

Future Crude Palm Oil, FCPO – Near term weakness to retest RM3000 support.

CPO prices tumbled to as low as RM3148/MT (-21% from 52- week high of RM3967/MT on Feb 10) before ending 1.1% lower to a 5-month low of RM3195/MT last Friday. The fall was in line with tumbling crude oil prices and soy bean prices as commodity funds liquidated positions, higher output expectations as favorable weather boosted yields in key oil palm growing areas in Malaysia.

Near term outlook has turned negative, following the breach of several key support levels i.e. mid and lower Bollinger bands and the crucial 200-d SMA, coupled with bearish technicals.

Immediate support levels are the RM3048 (61.8% FR), RM3000 psychological level and around RM2850 (downtrend channel). Outlook will become very bearish should the long term Up-Trend-Line (UTL) of RM2750 is broken. Any technical rebound due to oversold positions are likely to be capped at RM3223 (50% FR) and 30-d SMA (RM3308). Higher rebound targets are higher Bollinger band (RM3412) and RM3545 (weekly mid Bollinger band).

Daily Future Crude Palm Oil (FCPO) Is Drifting Lower Towards The Downtrend Channel.
CPO 09-05-2011

Weekly FCPO: Crucial Uptrend Line (UTL) Support Around RM2750/MT.
CPO 09-05-2011a

Source: HLeFutures

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