Naked Chart Trading: CPO & Plantation 22 Apr 2024

FCPO had been in a long sideway range between RM3190-RM4500 since the price normalization in Jun 2022. The prices tested to break above RM4500 sideway high in Aug 2022, Nov 2022, Mar 2023 and recently Apr 2024 but failed and go back to range every times.

FCPO tested twice to below RM3200 but rebounded too, once in Sep 2022 and another in Jun 2023, where it started a steady rebound trend, marked its lowest in year 2023 at RM3500 level. However last week sharp selloff may trigger a bearish wave to retest RM3500 level.

Immediate support will be seen at RM3500 and RM3200 level, while resistance at RM4200 and RM4500 level. Overall, FCPO is able to sustain around RM4000 level, a strong ground for plantation stocks to acheive better earnings in coming quarters.

Bursa Plantation Index, on the other hand, hit its highest since Jun 2022, remains its short term more to bullish trend, helped by some of its largest market cap component stocks such as SIMEPLT, KLK and IOICORP. The index was showing weakness last week with more than 1% losses and currently testing Fibo 50% retracement level from last week's bottom.

By studying comparison above, I found there is a correlation between FCPO prices and performance of plantation stocks. Continue to watch out factors below which likely affect CPO prices:

1. Weather
2. Labor availability and cost
3. Foreign policies on palm oil import
4. Prices of Indonesian palm oil prices and Dalian palm olein prices
5. Government policies of oil palm estate re-plant
6. Cost of fertilizers

Disclaimer
This content is for reference only and does not constitute any investment advice, and past performance is not indicative of future performance. Returns will vary, and all investments carry risks, including loss of principal. Please make your own investment decisions.