Tuesday, August 04, 2015

CPO: Breaking its horizontal support at RM2075

At the close yesterday, CPO broke below the horizontal support of RM2075. A quick rebound is possible, with or without a visit to the psychological RM2000 mark. A breakdown of the RM2000 level would send CPO to its next strong support at RM1750.

With MACD deep into negative territory and downtrend gathering momentum, the technical outlook for CPO is rather bearish.

Chart 1: CPO's daily chart as at Aug 3, 2015 (Source: ifs.marketcenter

The weakness of CPO reflects the overall weakness in the commodity complex. Who would have thought crude oil (WTIC) would revisit its low again! The double bottom reversal in April failed to blossom into the start of an uptrend. We can only hope that the support at USD45 will hold- setting the stage for a triple bottom reversal.

Chart 2: WTIC's weekly chart as at Aug 3, 2015 (Source: Stockcharts)

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