Kuala Lumpur Crude palm oil futures: Stopped out/S.A.
SEPT CPO futures closed higher by RM49 at 2383 on relatively high volume of 6,956 lots.
1. We were stopped out of CPO yesterday at 2364.
2. Yesterday we had called to go long if 2364 is touched.
3. We are going long because the stochastic is on buy signal from near an oversold area.
4. Also, price has move up above the lower Bollinger band.
5. But strictly speaking, we should not go long as this market is prone to U-turn back down.
6. As such a conservative trader (and we) would rather stay aside instead of going long today.
If you are aggressive then you can turn long, but place sell-stop below day before
yesterday’s low, i.e. @ 2314 OL.
7. The next up target is 2560 and the next down target is 2153.
General commentary: We were whipped by the rebounding market yesterday and stopped out at 2364. It was a tricky market alright, hence our suggestion to stay out today.
Next upside targets: 2560/2749 (hit)/3313 (targets revised on June 5)
Downside support: 2153
Ichimoku chart: (Based on kumo (clouds), CPO is long. Kumo support is at 2111. Ichimoku chart will turn short @ 2110 OL (updated on June 11, 2007)
Average True Range for CPO: A.T.R. is 85.36 for CPO. This implies you need to put a stop above/below this A.T.R. or you can get stopped out due to the volatility factor. We advocate a 1.5 x or 2 x the ATR. We are using a 5 days ATR.
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