CPO breached the RM2400 support

CPO has broken below its RM2400 support last Tuesday (September 9th). Despite a strong rebound last Friday (September 12th), there was no follow-through this Monday. The November delivery contract dropped RM140 to RM2240. As at 4.45 pm today, the same contract was down RM112 to RM2128. From the daily chart (Chart 1) below, we can see that the Bollinger Bands are beginning to expand. This indicates that the CPO prices may have more downside.


Chart 1: CPO's daily chart as at September 15, 2008 (source: ifs.marketcenter.com)

At the same time, we can see that Soya Oil had just broken its uptrend line that stretched back to October 2006 (see Chart 2 below). It had earlier breached the strong horizontal support at 49-50 mark.


Chart 2: Soya Oil's weekly chart as at September 15, 2008 (source: futures.tradingcharts.com)