Price of Crude Palm Oil Futures weakens

After rebounding at RM3,430, the price of Crude Palm Oil futures (3rd month contract) (FCPO)went to a high of RM3,582, falling short of the RM3,650 rebound target I anticipated about two weeks ago. The FPCO price declined and breached the RM3,430 support level. The FCPO closed at RM3,392 last Friday with a low of RM3,358.

Technically, the price of FCPO is still currently in a consolidation period, which started since the middle of March this year. The bears are currently winning in this consolidation and would ambush any bulls that try to cross over them. The Relative Strength Index indicator (RSI) is showing this signs with lower lows and lower highs and the RSI is now below the benchmark 50 level.

A short technical rebound is expected (based on some Fibonacci studies) in the next few days but again, the bulls may get slaughtered by the bears again and then test the RM3,300 support level. Resistance level is RM3,500.

By Benny Lee