CPO is violating its uptrend line

At the end of the morning session today, CPO closed at RM3078 per tonne. At that price, CPO has broken below its medium-term uptrend line support at RM3300. In fact, it is lower than the low of RM3200 recorded last week (see Chart 1 & 2 below). A quick recovery above the RM3300 is important, failing which the current CPO's uptrend is deemed over.


Chart 1: CPO's daily chart as at March 31, 2008 (source: ifs.marketcenter.com)



Chart 2: CPO's weekly chart as at March 31, 2008 (source: ifs.marketcenter.com)

Like CPO, Soya Oil has also violated its medium-term uptrend line support at 57 two days ago. Yesterday, it went below the low of 54 recorded last Friday. Again a quick recovery is very important, failing which Soya Oil could slide off to its long-term uptrend line support at 42-43.


Chart 3: Soya Oil's daily chart as at March 31, 2008 (source: futures.tradingcharts.com)



Chart 4: Soya Oil's weekly chart as at March 31, 2008 (source: futures.tradingcharts.com)

The present weakness in CPO is likely to drag down the prices of plantation stocks. Be careful when you buy into the present correction in some of the plantation stocks.