CPO - bearish ? I rather bet on the buy side

The last few days it began with Citibank, then follows by OSK and Goldman Sach - all of their people suddenly seem to come together for a meeting and decided that CPO is getting increasing bearish. As usual they cited all the fundamental figures and advise the public should keep away from the plantation stocks.

Whenever the 'experts' congregate and comment on a market and they all agree on a 'x' direction, I always sit up and take attention - BUT I would always look at the opposite 'Y' direction. Yes sir. I do not trust them and very often I am able to make some decent profit from taking that opposite directional trade. Of course I am saying that they are always wrong, but I would rather trust my own readings than from theirs.

So I take a serious look at the CPO's chart and this is what I read:-


The weekly chart's MACD and the Stochastic are still positive and moving upwards and most importantly is that prices maintain above the Bollinger Band top (since March, 2008). All these are telling us to be a little bit of bullish biased. BUT since the weekly ADX has been falling , so we do NOT want to become overly bullish yet. The current reading of D+ and D- is both at 23 so we can read that the bull force and bear force is equal.

So for the weekly chart, we need to watch it for another 1-2 weeks to see where this market is really going. Any weekly closing of above 2017 will be the first sign the bull is gaining strength.

As for the daily chart:-


The Stochastic has already crossed up positively. The MACD is turning its head but has not yet crossed up positively YET. Price managed to closed above the upper Bollinger Band which may be taken as an initial buying signal. The D+ is above the D- and it has managed to go above its prior peak (as marked out in the chart) All these 4 items are bullish.

I notice even the ADX which has been lying dead below its 20 signal line now has begun to raise its head. This may be telling us a new trend is in formation.

So, I would summarise from both the daily and weekly charts, CPO is still bullish biased than the other way around. If I have to place my trade now, I would have place in buy orders.

BUT, there is something inside both the daily and weekly charts that really get me all excited - and that is both their Bollinger Band have been squeezing. If you have followed my writing all these years, you would know a squeezing Bollinger Band usually bring forth explosive moves. So, watch this market closely.