CPO Chart

Rising US Dollar to cap Crude & CPO Upside

 SUPPORT 

2981

3000

RESISTANCE

SMA 14 >>> 3065

SMA 31 >>> 3086

SMA 21 >>> 3110

HAPPY TRADING 

Crude Palm Oil Slips On Profit-Taking, US, Europe Worries

CPO futures ended lower on previous Friday but manage to finished the week positively. Tracking the performance of Soya oil, palm oil market took a dip on morning and afternoon session but the slump were limited by positive export figures announce by cargo surveyors ITS and SGS. 

ITS reported that Malaysia July 1-15 Palm Oil Exports 752,047 Tons, Up 12% On Month while SGS announced July 1-15 Palm Oil Exports 731,842 Tons, +4.6%. Market does not re-act to these news until the late afternoon session where the benchmark Sept start to bounce back after it has fell down to 3,115 level. The benchmark Sept saw a swift rebound right after it hit that low to 3,138 as Buyers step in to accumulate Long position due to temporary oversold condition. Palm oil market is likely to recover further as volume rose steadily when the market goes up, a basic condition to identify genuine market movement and to filter out false direction. 

Technically, the benchmark Sept had breakout from a congestion period judging from daily chart, this event might caused the market to have a major rebound. The highlighted eclipse plus green horizontal line is likely serve a base or major support for the time being.  

Crude palm oil futures on Malaysia’s derivatives exchange fell Monday, with profit-taking kicking in after earlier gains, as the market took cues from the weakness in other commodities.

The new benchmark October CPO on the Bursa Malaysia Derivatives ended 1.2% lower at MYR3,078 a metric ton, after trading between MYR3,068 and MYR3,140/ton. Sept contract closed at 3085 down 31.

HAPPY TRADING

BMD Crude Palm Oil Futures >>> Outlook 14 July 2011

CPO Inventory To Cap Prices 
It was clear that CPO bulls were in charge the whole session yesterday. For this week, the technical reading on the chart have been tricky when the market dips due to overwhelming stocks concern (on Tuesday) after the benchmark Sept was anticipated to recover after it hit above 3,100 level past week. To many surprises, the benchmark Sept manage to reach an important resistance level to observe. 


Bottom line, market is going to move extensively (either way) due to the record high open interest on palm oil market.

If the market kept on recovering extensively, more Short holder will be force to shed their positions big time, vice versa. It was interesting to see, Sellers steps in to accumulate or initiate new positions while Long holders cover their holding when the market rose up to 3,095 level yesterday. 


Nonetheless, for the market to sustain these positive momentum, it is (Sept contract) best for it close above the resistance trend line at least for a session.  For today, resistance is pegged at 3,100 while support is located around 3,059 level.

Daily Pivot Point

R2=3117

R1=3099

S1=3059

S2=3037

ZLBT Trade Strategy

Aggresive SHORT with stop @ close above 3120

Short Target 3050, 3020, 3000, 2985

Disclaimer

Information and opinions contained in this report are for educational purposes only. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness.