CPO testing a critical support

CPO is resting on the horizontal support of RM2200 today. Important to note that the Parabolic SAR (short for 'stop-and-reversal' indicator) has moved above the price- signaling the potential for a downside move. More importantly, CPO is now trading below the lower Bollinger Band, which could lead to an expansion of a downside move.


 
 Chart 1: CPO's daily chart as at November 27, 2012 (source: ifs.marketcenter.com)

Plantation index has just broken below its long-term uptrend line, SS at 8000. The last time, Plantation index broke its long-term uptrend line was in July 2008, where the index dropped from the breakdown level of 7600 to 3000. As such, it is critical that the Plantation index must recover quickly above the long-term uptrend line in order to avoid a similar downfall.


Chart 2: Plantation index's weekly chart as at Nov 27, 2012 (Source: Quickcharts)