Dear Friends & Associates,
The crude palm oil futures prices expanded on it downward rally in May and settled today near the tail-end of its three-month old bearish cycle.
My earlier price projection was wrong. Those who sold in May and went away, really did well!
The August futures prices made new-lows for 2014 on 26th May at RM2,483 per tonne. Over the last seven-trading days, the August futures were locked in range-trading within the RM2,540- RM2,485 levels.
Strictly from a technical point of view, the main trend of the CPO futures is still negative.
The weekly GMT trend-tracker which triggered the sell-signal on March 21st stays negative for the price trend as at today’s close. (see weekly chart)
Currently, the important technical price-support levels of RM2,520-RM2,485 are being test. In the event of a downward break from these levels, it would signal the resumption of the bearish price trend. Renewed selling pressure from current levels may take prices lower to re-visit the RM2,450-RM2,400 levels last seen in October 2013.
BMD CPO AUGUST FUTURES- WEEKLY
While most analysts and traders are concern about the downside of the market now, cautious traders would be keeping a watch full eye for clues of a turnaround to this well-defined three months old downtrend.
An upper-end chart resistance now stands at the RM2,530-RM2,550 levels. We are expecting to see some meaningful upward technical price adjustments in the course of the next 20-trading days.
Should the price rebound penetrate and hold above these chart-resistance levels, we would take it as a sign that the three-months downward trend has ended.
An upward retracement from current levels may lift prices higher to test its upside recovery-target at the RM2,600-RM2,650. It is quite normal for a grossly oversold market to recover 25 to 30 percent of its losses.
Please be inform that my next Master Trader Tutorial (Palm Oil) would be held in Singapore on 3-4 October, 2014 and in Jakarta in early-November 2014. Further information and registration can be obtain from our web.
MPOB Month-End Data Charts for your analytical pleasure.
MPOB End-April Stock, Output & Price
MPOB End-April Export & Price