2009
Crude Palm Oil: Strong Resistance at RM 2,800
Filed Under (Finance Help) by Admin on 19-05-2009
The price of crude palm oil in the futures market (FCPO) has been very bullish in the past one month, despite being overbought and having a technical resistance at RM2,540 per metric ton. The price of FCPO surged RM204 or 8.3 percent on-month. It went as high as RM2,799 twice this month but failed to break above this level before settling at RM2,663 on Friday. The surge in price was a result of speculation because of improving export figures. The price has retraced to almost 50 percent from the high of RM4,486 in March 2008 to a low of RM1,331 in October 2008.
The weakening price movement in the past few days despite strong fundamental factors shows that the market has already anticipated these factors and is already discounted in the current price. There is a strong resistance at RM2,800 and to go beyond this level, the market needs a much stronger catalyst to boost the price of CPO.