KCPO:- Will CPO Follow Crude Oil ? 17/5/2010

 

Last Monday the market took out my stop at 2527 but I did not take any new long position as the Stochastic remains negative and soon followed by the MACD. I sold again when price closed below the bottom Bollinger Band as the signal is now supported by both the indicators. The ADX has again started to rise again and it is moving towards the 20's level. If it can go above there, it would signal the beginning of a new trend. It is getting more promising as I note that the D- is expanding upward and took out its prior peak and also the width of the Bollinger Band has started to expand.  Place a stop at 2487.

 

The weekly chart indicators remain negative and keep falling.The Stochastic has already fallen below its 50's signal line which is a more confirming sell signal. The MACD is fast approaching its zero signal line, if breached, that would be another great sell signal. Most important of all is that price has closed below the bottom Bollinger Band which is a major sell signal. The only missing confirmation is the ADX which is still falling which is NOT confirming a new trend yet.

Last week there was some report that CPO stock has been falling which by logic is bullish for its prices. But if you are one of those who love the stock levels, you may find it very difficult to understand as to why CPO rallied to 4,500 last even though its stock level has been rising consistently. CPO may be now following what the other commodities are doing now - going down. And if you are trading NYMEX crude oil and has shorted, you should be a very happy person. If we should see crude at 45.00, think how far down will CPO  go.