CPO - More Weaknesses ? 18/1/2010

As I had sold last week, the short trade has behaved well. The negative MACD keeps its descent toward the zero signal line. If breached, it would provide another good reason to sell more. The Stochastic is still falling and may enter into the oversold area soon. I call it oversold as the ADX is not rising but falling, so at best I would call this a minor move. Place stop at 2549.

The weekly chart has begun to show some initial weaknesses as it lost 139 points. The Stochastic has turned negative but it still remain above the 80's signal line. Watch out for more sell signal if the Stochastic crosses down the 80's signal line. The MACD has hooked down but it still remain positive. The previously rising ADX has now turned flat confirming the prior trend is fading. All these signals are still not negative yet but the more damaging item is the weekly price has ow closed below the upper Bollinger Band. This usually is taken by those more adventurous traders as an initial sell signal. So unless prices go back up above the upper Bollinger Band soon, I would start to turn more bearish on CPO.

CPO is currently acting out of the MACD's bearish divergence at its daily chart. We may see it goes down to 2370 or 2290.