CPO- downtrend to continue

CPO broke below its strong horizontal support of RM2370. With the Bollinger Band expanding, CPO is expected to drop further. The next support would be RM2200 & then the psychological RM2000 mark.


Chart 1: CPO's weekly chart as at April 17, 2013 (Source: ifs.marketcenter)

The decline in CPO is in line with the drop in the prices of commodities in general. The Reuters/Jefferies CRB index has breached its strong horizontal support at 292 and it is now at 280. It may revisit its 2012 low of 267.


Chart 2: CRB index's weekly chart as at April 17, 2013 (Source: Stockcharts)

Crude Oil prices (as per WTIC) has similarly broken to the downside of its "symmetrical triangle" this week.






Chart 3: WTIC index's weekly chart as at April 17, 2013 (Source: Stockcharts)

Based on the above, I expect further weakness ahead for CPO prices and plantation stocks.