CPO- downtrend likely to continue

CPO continued its decline after breaking below its long-term uptrend line at RM3200 (see the composite Chart 1 below).


Chart 1: CPO's weekly chart as at May 28, 2012 (Source: iFS.marketcenter.com)

In early June, CPO broke below the psychological RM3000 level. From the daily Chart 2 below, we can see that the Bollinger Band is expanding and the prices are heading lower. This means that CPO's downtrend is likely to continue.


Chart 2: CPO's daily chart as at June 14, 2012 (Source: iFS.marketcenter.com)

Based on the above technical outlook, we should underweight the Plantation sector.