Crude palm oil (CPO) futures have regained bullish momentum after breaking above the key RM4,700-per-tonne level, prompting RHB Investment Bank to reverse its trading stance and target a further climb towards RM4,900.
In a technical analysis note, the research house said the benchmark FCPO contract closed at RM4,710 on July 23 after rising sharply from an opening price of RM4,619.
During the session, prices touched an intraday low of RM4,616 before climbing to a high of RM4,721, ultimately ending the day with what RHB described as a fresh bullish candlestick formation.
The breakout above the RM4,700 resistance level signals that strong upward momentum is taking hold, with the next technical resistance seen at RM4,900.
Following the breakout, RHB has shifted its trading recommendation from bearish to bullish.
The research house said it has exited its short position, which was initiated at RM4,481 on May 12, after the stop-loss level at RM4,700 was triggered. It has now initiated a long position at the July 23 closing price of RM4,710.
To manage downside risk, the bank has set a new stop-loss level at RM4,530.
RHB noted that the 50-day and 200-day simple moving averages (SMA) continue to provide technical support for prices, adding that the bullish outlook remains intact as long as FCPO stays above the RM4,530 support threshold.
The bank identified RM4,530 as the immediate support level, followed by RM4,390, while upside resistance is pegged at RM4,900, with a longer-term target of RM5,100 if buying momentum persists.
The latest technical breakout comes as palm oil prices continue to be supported by improving market sentiment, with traders closely monitoring supply-demand fundamentals and developments in competing edible oils.
