CPO Commentary

News Bites-

* Market Talk: Talk that chinese regulators moves to tightening trading rules to curb speculation and cool inflation in China, as well as likely weaker India edible oils imports may both place pressure on soyoil and palm oil market. A local broking house commented that CPO prices are likely to fall towards RM2,950 a ton in the near future due to the above given reasons.

Outlook-

* Fundamental: Expect selling pressure on bearish fundamental ahead. Watch for technical to trade.

* Technical: Another daily hanging man candle formed yesterday. A particular pattern signifying bullish reversal and prices are losing some upward momentum. The candle also alike bearish dragonfly doji pattern where opening and closing are nearly identical wihout an upper wick on top, a much stronger and reliable candle compare with hanging man offering bearish signal. note that, open interest for February contract jump 71.7% or 5512 lots from 7,686 to 13,198 lots while benchmark January contract only increased 4.2% or 1136 lots to 28,062 lots, likely indication traders are building up their position in February contract.

With mix technical indications, would expect prices to consolidate between 3010, low of Aug 27 , and 3084, high of Oct 25, pending any breakout to provide a clearer picture in near term.

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