Tuesday, September 18, 2012
CPO- the slide continued
CPO broke below the horizontal support of RM2800 today (see Chart 1). This breakdown was not due to a last-minute selldown. The breakdown happened at the start of the morning trading and it went as low as RM2683 before it rebounded to close at RM2714 (see Chart 2). CPO's immediate support levels are at the horizontal line at RM2700 & then at RM2400.
Chart 1: CPO's daily chart as at September 18, 2012 (Source: iFS.marketcenter.com)
Chart 2: CPO's 30-min intra-day chart as at September 18, 2012 (Source: iFS.marketcenter.com)
The continued slide in CPO (after the breaking below its long-term uptrend line) should be followed by similar breakdown in the Plantation index. Looking at Chart 3 below, the immediate support for the Plantation index is at 8000 but the stronger support is at 6500-7000. If this index drops to the 7000 mark, this would translate to a drop of 12-13% for plantation stocks.
Chart 3: Plantation index's weekly chart as at September 18, 2012 (Source: tradesignum)