Crude Palm Oil (CPO) : Likely To Head Towards RM3,000 - RM3,300 Soon! - 12/010/2010

Crude palm oil futures – Powerful breakout with a breakaway gap!

♦ In our Commodities & Currencies technical report dated yesterday (11 Oct 2010), we have highlighted that the Crude Palm Oil futures (CPO) was likely to stage a powerful breakout from the key resistance of RM2,760 soon.
♦ The breakout, if successful, will mark a fresh penetration of the previous tough trading zone of RM2,500 – RM2,760 where the CPO was traded in most of the periods since late 2009.
♦ Indeed, the CPO opened yesterday’s trading with a powerful jump-start at RM2,903, far above the immediate resistance level of RM2,760 (last Friday’s closing).
♦ Not only that, despite strong profit-takng activities throughout the afternoon, the commodity still managed to launch a late push-up to close the day at RM2,930, near its day high of RM2,940 (refer Chart 1).
♦ As a result, the CPO registered a positive bullish candle on the chart, with a technical gap from RM2,808 to RM2,886.
♦ Technically, the CPO has broke out from the nearly one-year old consolidation between RM2,500 and RM2,760 yesterday, with a powerful breakout candle and a huge breakaway gap.
♦ This was in line with our expectation on Monday’s report.
♦ Given the upbeat momentum readings, and the uptrend on the 10-week SMA at RM2,677, and the positive breakaway pattern, the CPO is likely to head towards the next resistance zone of RM3,000 – RM3,300 in the near term, in our view.

Crude Palm Oil (CPO) : Likely To Head Towards RM3,000 - RM3,300 Soon! - 12/010/2010