FCPO Commentary on 20/11/09

CPO 3rd month Feb futures contract fall RM29 points lower as compare to previous trading sessions to close at RM2371 with a total of 11,840 lots traded in the market. CPO price was traded lower due to heavy profit taking activity after huge swing on previous trading days. Lack of follow through buying interest from soybean oil and crude oil during electronic trading session further encourages profit taking due to weak fundamental support.

Technically, CPO price fail to penetrate 61.8% Fibonacci resistance levels at RM2400 regions after 3 attempts in the hourly chart. Based on our technical view, CPO price seems complete wave B count and wave 4 was expected to encounter great support around RM2342 and RM2297; 38.1% and 61.8% Fibonacci support levels. Our opinion suggests CPO price would likely to trade upwards soon after support level is found in the coming trading session. Traders were advice to apply long on dip strategy in the coming trading session while be cautious around resistance levels at RM2385 and RM2406 regions.