CPO may be due for a rebound

CPO may be due for a rebound: "In mid-August, I expected the correction in CPO prices to be relatively mild, probably well supported at RM2300-2350 levels (go here). I was proven wrong when CPO prices hit the RM2100 level on Monday. Nevertheless, the Slow Stochastics indicator is flashing a bullish divergence, just like in early July. Back then, we saw the bullish divergence and then a bullish MACD hook-up. Thereafter, CPO prices enjoyed a decent rally from RM2000 to RM2500. So, look out for some recovery in CPO prices & a bullish MACD hook-up over the next few days.


Chart: CPO's daily chart as at Sepy 16, 2009_3.00pm (Source: ifs.marketcenter.com)

A rally in CPO prices would be positive for plantation stocks. Among them, I like IOI, Genting Plant & IJM Plant.

Note: As at 3.00pm, CPO October futures are trading at RM2200 (up RM51).

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