Dear Friends & Associates,
Wishing you a Merry Christmas and Happy Prosperous New Year.
The ride ahead into the early part of 2015 could be bumpy.
It is time to take another look at the CPO market. In these very challenging times, it is anyone’s guess whether CPO prices will remain at current levels or slide down further in the coming months.
From it rebound-highs of RM2,345 in early-November, CPO prices declined and entered into congestion trading for four weeks at around the RM2,250-RM2,200 levels. This was followed by a violation of its lower band-trading support at RM2,200 on 28th November and that brought on a strong wave of selling pressure causing prices to fall below RM2,100 briefly.
Over the last three weeks of December, CPO prices meandered like a snake in a large water pipe between the RM2,100 to RM2,200 levels.
During the course of the seven-week price congestion, the open-interest or size of the entire market dropped sharply from its historical peak of over three hundred and thirty thousand contracts to 219,940 contracts as at Friday’s close. This gives rise to the notion that we are still in a negative cash flow phase.
Our weekly G.M.Teoh Trend-Tracker (GMT T.T) triggered the sell-signal on 28th November and remained negative for the near-term trend. (see chart)
BMD CRUDE PALM OIL – MARCH, 2015 Futures, Weekly Chart
At the moment it appears that the market is in tunnel and the light is dim.
Technically speaking, the immediate-term price-support is peg at the RM2,100-RM2,080. Violation of these key chart-support levels in the coming days could generate fresh hedge and speculative selling momentum and force the market to seek for a new trading base around the RM1,930-RM1,900.
Immediate term price resistance are expected around the RM2,180-RM2,200 levels.
The GMT T.T. gave the sell-signal for the CME soyoil futures in early-November. (see chart).
Based on the weekly chart, CME SBO futures have an important support at 31.50-31.00 cents. A break below these levels would mark the resumption of the bearish trend.
CME SBO FUTURES JAN 2015 –Weekly Chart
Please be inform that the next Master Trader Tutorial (Palm Oil) would be held in Kuala Lumpur on 27th & 28th February, 2015. (Immediately before the POC2015 Palm & Lauric Oils Price Outlook Conference in Kuala Lumpur). New students are welcome.
Past students who wish to do a re-attendance tutorial are also welcome. A special fee would apply.
Further information and registration can be obtain from our web: www.palmoil-mtt.com
hp 012 2688121