CPO broke above its medium-term downtrend line at RM2200 last Friday (see Chart 1). With this breakout, CPO has found a temporary bottom. It may move sideway for a while or it may stage a short rally to test the psychological resistance at RM2500 or possibly challenge its intermediate downtrend line at RM2850 (see Chart 2).
A rebound in CPO prices would provide a catalyst for a re-rating in plantation stocks that had been sold down over the past few weeks.
Chart 1: CPO's daily chart aa at Dec 21, 2012 (Source: iFSmarketcenter.com)
Chart 2: CPO's weekly chart aa at Dec 21, 2012 (Source: iFSmarketcenter.com)
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