The crude palm oil futures (FCPO) market recorded a counter-trend rebound yesterday, gaining RM13 to close at RM4,551 per tonne, according to a technical analysis report by RHB Research.
FCPO opened the trading session lower at RM4,534 before slipping to an intraday low of MYR4,528. However, strong buying interest emerged later in the session, lifting prices to a high of RM4,580 before closing near the day’s peak.
The positive movement resulted in the formation of a bullish candlestick pattern, indicating renewed buying momentum. The rebound was viewed as a recovery against the prevailing market trend rather than a confirmed reversal.
RHB Research noted that the Relative Strength Index (RSI) has continued to rise, suggesting that upward momentum is gradually returning. However, FCPO remains below its 50-day Simple Moving Average (SMA), indicating that the medium-term bearish market structure remains intact.
The research house expects selling pressure to return if FCPO’s rebound continues towards the 50-day SMA level. For now, RHB Research maintained its negative trading bias unless the commodity breaks above the RM4,700 level.
The firm recommended traders maintain their existing short positions initiated on May 12 at RM4,481. The stop-loss threshold remains at RM4,700 to manage potential trading risks.
In terms of technical levels, immediate support is identified at RM4,390, followed by RM4,300. Resistance levels are seen at MYR4,700 and the higher resistance level of RM4,840.
RHB Research said FCPO’s near-term direction will depend on whether the recent recovery can sustain momentum or whether selling pressure resumes near key technical resistance levels.
