CPO sharp rally tested the line connecting its previous peaks at RM3118. The last 2-3 days of correction brought CPO prices below its medium-term uptrend line at RM3010-3015. It is likely that the price correction may continue in the medium-term.
Chart 1: CPO's monthly chart as at Jan 17, 2020 (Source: Investing.com)
Chart 2: CPO's daily chart as at Jan 17, 2020 (Source: Investing.com)
The sharp rally in CPO prices caused an upside breakout for Plant index at 6900 in early November. The ensuing rally brought Plant index to a high of 7900 in the final week of December last year. The last 3 weeks of correction has finally brought the Plant index below its medium-term uptrend line at 7550 last week. Unless CPO price recovers significantly next few days, Plant index is likely to go lower.
Chart 3; Plant's weekly chart as at Jan 17, 2020 (Source: Shareinvestor.com)
Chart 4; Plant''s daiy chart as at Jan 17, 2020 (Source: Shareinvestor.com)
Based on the above, I expect plantation share prices to continue to correct in the near term.
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