CPO correction may start soon

Just 24 hours ago, we have noted that CPO futures for June delivery closed at RM2735 at the end of yesterday's morning session. The same contract closed at RM2586 today, down RM120 from yesterday's closing price (of RM2706). I have pointed out that if CPO "price can hold above RM2600, the CPO price's uptrend is still be intact. A break below that could signal a correction in CPO". We can see from the chart below that 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.


Chart: CPO's daily chart as at May 21, 2009 (source: ifs.marketcenter.com)