On April 15, I have posted about the Plantation index & stocks lagging behind the big price movement for CPO. I have noted that CPO prices could come under pressure in the later part of the year and recommended some profit-taking for some plantation stocks that have run up very well (such as, Asiatic & KLK). Since then, CPO prices had continued its rise until it hit a high of RM2800 per ton.
Yesterday, the Parabolic SAR (short for 'stop-and-reversal' indicator) has moved above the CPO price. This negative sign could signal the start of the correction in CPO prices. With this correction in CPO, the outlook for Plantation stocks is likely to turn negative.
Chart: CPO's daily chart as at April 29, 2009 (source: ifs.marketcenter.com)
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