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 Lower trend likely for CPO this week

Monday, November 19, 2001 (The Star)CRUDE palm oil futures prices on the Malaysia Derivatives Exchange (MDEX)made fresh rally-highs in early trading and reversed direction during theshortened four-day trading week and returned a good portion of their rallygains to close Friday in the negative territory. Strong long liquidationand profit-taking towards late week drove the January contract below theRM1,100 per tonne level.The January futures slipped from a week’s high of RM1,170 to RM1,081 andclosed Friday lower at RM1,085, off RM35 per tonne from a week ago.Based on chart, the January futures ended the week negative and had givenindication that a downward technical correction has started. Violation ofthe uptrend support-line at the RM1,125-RM1,130 levels during Friday’sclose has turned the immediate-term chart picture bearish. Continuation ofthe downward momentum this week should send the market lower for a test ofits immediate chart support at the RM1,070-RM1,065 levels. A successfulbreak below this important chart support would likely pressure the marketlower for a test of its minor chart support at the RM1,040-RM1050 levels.Chart resistance for this week is pegged at the RM1,100-RM1,110 levels.The 12-day exponentially smoothed moving-average price line (ESA) endedthe week negative and closed higher at RM1,082. Based on the ESA-line, theimmediate market has an immediate cycle-support at the RM1,082 level.Breaking of this cycle-support would confirm that a negative cycle hasstarted.Technically the daily stochastics ended the week bearish and indicatedthat a downward correction has begun. The oscillator per cent K closedbelow the oscillator per cent D and finished the week sharply lower at38.46% and 65.40% respectively.The daily Momentum Index turned bearish during Friday’s close andsignalled that a trend-reversal has started. The MI settled the weeksharply lower at 110.00 points.The Moving-Average Convergence/Divergence (MACD) triggered the sell signalon Friday and called for more downside trading this week. The MACD endedbelow the trigger-line and finished the week higher in the positiveterritory at 43.34 and 44.16 points respectively.

Malaysian Palm Oil Board ( MPOB ) Lot 6, SS6, Jalan Perbandaran, 47301 Kelana Jaya, Selangor Darul Ehsan, MALAYSIA.
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