Wednesday, October 26, 2011

CPO Price: Poised For A Further Breakout

Commodity to watch – CPO

CPO price: Poised for a further breakout

IOI’s chairman Tan Sri Lee said CPO prices are expected to rise above RM3000/MT in the next three months due to the drop in production amid increasing overseas demand. He added that the rainy season coupled with a labour shortage is expected to derail production of fresh fruit bunches in the medium term in the wake of increasing demand from China, India and Pakistan.

To recap, CPO prices jumped 2.1% to RM2951/MT on 25 Oct and had rebounded 6.5% from 52-wk low of RM2771 on 7 Oct.

After surpassing its 30-d SMA and a breakout of the downtrend line (DTL) from 52-wk high, near term CPO outlook has turned better amid strengthening weekly and daily technical readings.

Immediate upside resistance targets are RM3040 (23.6% FR) and RM3217 (38.2% FR) while stiffer resistance is situated near 50% FR at RM3362. Immediate supports are mid Bollinger band (now at RM2856) and lower Bollinger band of RM2763 levels.

Daily COP: Poised To Retest RM3040-RM3217 Upside Resistance Amid A DTL Breakout
CPO 27-10-2011

Weekly CPO: To Stage A Breakout Above The Uptrend Line Support Amid Bullish Technicals
CPO 27-10-2011a

Source: HLIB Research

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