CPO Futures Seen as Retreating Below MYR6,000: RHB Research

The research house maintains “SHORT” positions on the crude palm oil futures (FCPO).

The FCPO failed to retain its position above the psychological level of MYR6,000, and shed MYR307.00 last Friday to close at MYR5,629. The commodity opened at MYR5,980. After printing the session’s high of MYR6,098, selling pressure intensified during the afternoon and pulled the FCPO to the session’s low of MYR5,620 before closing. The negative price action reaffirms that the bears are in control and MYR6,000 has become a stiff psychological resistance now. Any rebound in the coming sessions would be blocked by the immediate resistance.

As the RSI is trending lower and has dropped below the 50% threshold, expect the negative momentum to follow through
and test the support point of MYR5,550, followed by the MYR5,358 level. The commodity may continue its correction until it finds an interim base, by forming a candlestick with long lower shadow. Until then, RHB Research is to hold on to a negative
trading bias.

Traders should stick with the short positions initiated at MYR6,361, i.e. the close of 14 March. To mitigate the trading risks, the stop-loss has been adjusted to MYR6,200. The immediate support has been revised to MYR5,550, followed by MYR5,358 or the low of 16 February. Conversely, the immediate resistance is set at MYR6,000, followed by MYR6,200.

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