Crude palm oil futures (FCPO) snapped a two-day winning streak on Thursday, as strong profit-taking activity pulled the benchmark contract down by RM16 to close at RM4,686. Despite the pullback, RHB Investment Bank has maintained its positive trading bias, viewing the price decline as a healthy consolidation phase within an ongoing upward trend.
The commodity opened higher at RM4,705 before advancing to print a intraday high of RM4,715. However, profit-taking quickly dragged prices down to a low of RM4,665, leaving a fresh bearish candlestick at the close.
Despite the negative single-session price action, RHB noted that the technical setup continues to favor buyers. Key technical indicators supporting the near-term uptrend include:
- Relative Strength Index (RSI): The indicator remains comfortably above 50%, signaling that broader bullish momentum is still intact.
- Simple Moving Averages (SMA): Both the 50-day and 200-day SMA lines continue to slope upwards, reinforcing the underlying support.
- Support Threshold: As long as the contract stays above the critical RM4,530 support level, the broader uptrend remains preserved.
RHB advises traders to keep long positions initiated at the July 23 close of RM4,710. To mitigate trading risks, the stop-loss threshold remains firmly placed at RM4,530.
On the downside, initial support is pegged at RM4,530, followed by a deeper support level at RM4,390. On the upside, immediate resistance stands at RM4,900, with the next target positioned at RM5,100 should buying pressure resume.
