The benchmark crude palm oil futures contract (FCPO) faced renewed selling pressure on Thursday, with prices declining RM76 to close lower at RM4,557, according to a report by RHB Research.
RHB said the FCPO began the trading session at RM4,624 and briefly climbed to an intraday high of RM4,630 before reversing lower. The contract later touched a low of RM4,520 before ending the day at RM4,558, forming a bearish candlestick pattern.
The research house noted that the latest negative price movement indicated a strengthening bearish momentum following the rejection at the RM4,700 resistance level.
“If the bearish momentum follows through, the commodity is likely to trend lower and test the RM4,500 level,” RHB said.
It added that in a bearish scenario, support levels could remain vulnerable, with a break below the nearest support potentially worsening market sentiment and pushing prices further down towards the next support level at RM4,390.
Based on the current price action, RHB maintained its negative trading bias on FCPO.
The research house recommended traders keep the short position initiated at the closing level of RM4,481 on May 12. The stop-loss threshold remains unchanged at RM4,700 to manage trading risks.
The immediate support level is pegged at RM4,500, followed by RM4,390, while the resistance level remains at RM4,700.
