KCPO:- Another Possible Up Move-21/6/2020

I am changing my stop and will close off my shorts on 2404 on coming Monday. This is due to the ADX has now gone above the D- which is usually a sign that the market has gone oversold. The Stochastic has also crossed up above its 20's level and the MACD , though remains negative but has begun to hook up.

Since the weekly chart ADX is now flat and below the 20's, I would call this market a sidway market. With this observation, I would pay more attention the Stochastic which has now gone to 15's. So there is a possibility that we may see a temporary bottom forming for now. You should pay attention to the lower Bollinger Band which is also happen to be the trendline resistance, any breaches above that area may signal a new upswing move.

Since both the daily and weekly Stochastic are oversold , so there is a chance that this market may see another up move again. If a new buy is triggered keep stop at 2365.

 

KCPO:- Will CPO follows the USD ? -14/6/2010

During last mid week this market lost its footing and went below its recent support. I sold accordingly as this is confirmed by both the Stochastic and MACD which have crossed down. The most exciting part of all these is probably the ADX which has been flat now has begun to rise.

Since the ADX is now at 25's, I would have to respect its possible intensity. Place stop at 2424.

The weekly chart Stochastic has crossed down into its 20's  while the MACD is within striking distance of  crossing down below its zero signal line. Both of these are usually taken as a more prominent sell signal. The ADX which has been falling has now turned flat, this may be taken as a signal that a trend may emerge soon. But its lowly 14's, whatever new trend will need to do a lot of convincing.

As CPO is frequently linked to the movement of the US Dollar and I think this could  be a cross confirmation that the USD may be heading for a sell off soon. As usual just when 99% of the experts are overly bullish about something, the opposite usual happens.

KCPO:- Market Is Dead. Stay Aside And Watch- 7/6/2010

 

Another week of the market going nowhere. The flat ADX confirms that. Now both the MACD and the Stochastic have turned positive and price even stay above the middle band, but with the lousy ADX, I would prefer price to close above its recent fractal high of 2501 before get excited. The level would also be above the upper band. It seems to be another short term up move may be possible.

The weekly chart remains same as last week. Both the Stochastic and the MACD continue to fall. The Stochastic may be crossing down its 20's signal line, I wonder would we see some strong selling emerges in the coming week ? The weekly ADX is still falling and it is now at 14's which is telling us the market is dead.

Now we have the daily chart which is slightly bullish but the weekly chart remains bearish as ever. But we do have both the periods' ADX dead, at least we can be sure that there is NO trend in this market. So you may not want to place any positions yet but just keep a watchout. I am very interested to see what will happen after these long periods of dead ADX.

 

KCPO:- Nothing Happens Again, For The Time Being -1/6/2010

As I suspected last week, it turned out to be another of those mini moves. If you had applied the yesterday low minus 2 points system, you would at least kept some profit. If you applied my stop at 2460, you would had incurred a small loss. But that is part of the trading game and this kind of thing happens all the time when the market is in a sideway mode.

The MACD remains negative while the Stochastic seems to be turning down again. Price may be above the lower Bollinger Band, but with the D- is still above the D+ , we are not getting any concrete signal to buy again. I also take note that the ADC continue to be flat which is telling us there is no or little trend in this market. So what I would do is to draw 2 horizontal lines to mark out its previous range and look for any breakout from this range before deciding the next course of action.

Both the weekly Stochastic and MACD continue to negative and falling. A word of caution here:- pay attention to the MACD is fast approaching its zero signal line, if that is breached, it would be a very significant sell signal. The falling ADX which is now at an extreme lows of 15's and the continuing tightening Bollinger Band are both confirming the lack of trend here, BUT they are also warning us that an explosive move may be on its way. So you should keep an eye on this.

I cannot find any major bullish or bearish formation in both the daily and weekly chart, so I cannot really say what is going to happen next. But if I am to force on a theory, maybe we can say there is an imperfect double tops formation, so if that is the case here, then we should pay more attention to the sell side.

KCPO:- Changing direction again ! 24/5/2010

This market is getting tough again as selling stalled after gaping down on last Monday. Price has started moving up and closed above the lower Bollinger Band on Thursday. This effectively stopped out my shorts and turned buy again with the support of the Stochastic crossing up above 20's. I will add more long positions when the MACD turns positive. Meanwhile place stop at 2460.

Please note the ADX is turning down and may fall below its 20's signal line, so be cautious that this may be another one of those mini moves. Be ready to take quick profit .

The weekly chart has failed to confirm any reversal. The Stochatic and MACD are still negative and still falling. In fact a  new sell signal has flashed when the D- goes above the D+. But I would not get too excited yet as the ADX is still falling which mean there is no trend in this market. So I would just act on the daily chart and trade on a short term basis and with smaller lots.

As the weekly Bollinger Band continues to tighten and the ADX stays below 20's since early April, this is another one of those exciting setup with possible explosive moves around the corner. So you should not get asleep at wheel. Though I must admit I am at a loss of  guessing its next possible direction.

Are Industry People Experts ? Something On Sime Darby

For some strange reasons we tend to think of those people in a particular industry would be know-it-all about that industry. Eg: we think our bankers/stock brokers/fund managers would know about financial markets more than us. A few of my friends also think people who are from plantation companies would know all about CPO price movement. The following old story about Sime Darby should break that myth. And over the years I have heard similar 'horror' stories of big plantation companies' misadventure in the CPO futures market and FX markets (they need those to hedge their exposure in their exports ):-

Sime Darby's RM120m loss: Trader goes missing

KUALA LUMPUR June 12, 2008 : Sime Darby Bhd's RM120 million futures trading loss may have been the work of a single rogue trader who made the wrong bet and was poorly supervised.

Existing and former company officials said the trader in question has since quit the company.

Sime Darby has declined to comment on the matter. The trader could not be contacted.

On Tuesday, Sime Darby fired two top executives after carrying out an inquiry into the trading losses at Golden Jomalina Food Industries, a subsidiary of Golden Hope Plantations Bhd.

Golden Hope has since last year been merged with Kumpulan Guthrie Bhd and Sime Darby Bhd.

Company officials said the trader was one of 20 to 30 futures traders employed by the company to sell Golden Hope's premium crude palm oil (CPO) in the open market to make a higher profit.

The company then buys standard quality CPO from the open market at a lower price so that it can make a better profit margin when used at its oleochemical division. That division processes CPO into value-added products like cooking oil, detergent and soap.

This is a normal practice by almost all plantation companies in Malaysia to protect themselves from the vagaries of CPO's fluctuating price.

"However, he made a mistake by betting against the market since the end of 2006 by locking CPO's selling prices at more than RM1,000 a tonne, thinking prices would go down.

"Until August, however, CPO prices more than doubled and he tried to cover up the losses by counter trading but was unable to do so. As a result, the company accumulated trading losses right until the run-up to the merger late last year," one of the officials said.

Realising the loss, the rogue trader who has been a Golden Hope staff for 10 years, left without giving notice. Officials said attempts to locate him failed as the address listed in the company's records turned out to be bogus.

A former official said futures traders were poorly supervised. For instance, they did not have a limit that stopped them from trading when a certain level of loss was incurred. 

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.

KCPO:- To Be Bearish Biased Is Prudent ? 10/5/2010

I cautioned about the prior up cycle will be a short one because of the low ADX. And true as it turned out, the market broke down again on last Tuesday. Since I told you to take profit on previous day low, that would had got you safely. Again this market does not offer a clear sign of its next course of action as the Stochastic has already turned negative but the MACD remains positive. Prices went up and down and basically stay within the Bollinger Band. Strange to note is that the ADX has begun to rise and crossed above the falling D+ which is usually a great sell signal. But since the other 2 indicator and price action do not yet confirm a clear sell signal, so I would wait for a few more days. I would look for the MACD to cross down before I start selling. By then if you have sold, place stop at 2527.



The weekly chart Bollinger Band continues to tighten and so is the ADX which is still falling, both are confirming there is no trend in this market. But as before, these are also classic signs of a major violent move ahead. Both the Stochastic and MACD are negative, the Stochastic is below its 50's signal line while the MACD is fast approaching its zero signal line. Watch for a weekly closing (coming Friday's closing) of below the bottom Bolliner Band of 2495. A solid sell signal would be in place.

As I have mentioned sometime back, I cannot seem to be able to make out what this market is going to do next. But with the indicators turning negative and most commodities falling in prices recently and the presence of an imperfect double tops, I would think to be more bearish biased would be more prudent. 

CPO:- Play on a short term 3/5/2010

Both the daily Stochastic and the MACD continue to rise, so I hang on to my longs on the short term. Please note the ADX has now fallen below 20's, so this cycle could be one of those very short lived one. You should be prepared to take profit swiftly. I would suggest you should place stop a few pips below 2 day or yesterday lows' and take note that 2,600 could be a strong resistance.



The weekly chart's Stochastic is turning around upward but still remain negative and the MACD is still negative. The ADX is below its 20's signal line and the Bollinger Band continues to tighten. These 2 indications are telling us that there is no trend in this market at this moment, but something BIG may be forthcoming soon.

KCPO:- It is buy again for the short term 26/4/2010

The weekly chart ADX has begun falling and now is below its 20's which is confirming the absence of trend in this market. Though both the Stochastic and the MACD remain negative, price has initially fallen below the lower Bollinger Band which would make a great short signal, but it managed to closed back up above it. Since the weekly chart ADX is telling us this market is "un-tradable", so we would have to concentrate on the daily chart.

As almost always in a listless market, there will be many false breakups or breakdowns. Last week, the market gaped down below its recent range as marked out by 2 horizontal lines but with no follow through action. And on last Friday, the market again reversed and went back and closed above the lower Bollinger Band by which you should closed off short positions. During the breakdown on last Monday, the D- did not break above its prior peak, thus offering no complimentary confirmation on the down move.

As at present, the immediate situation tends to put back the favor to the bulls as the Stochastic has crossed up and the MACD has also followed suit. For the more bravehearted traders, you may engage some long positions and keep 2494 as stop. As the ADX has begun to drop, indicating the prior down cycle may has ended, but the D- still dominate over the D+, you would want to be careful with long trades.

Since there are contradicting readings in the daily and weekly chart, so you should keep your trading time parameter  short term. Pay attention to the Stochastic, be ever ready to take profit or cut loss when it turns. We would have to wait again to see whether this will develop into something big or would this be just another small of those 3-5 days kind of trades.

KCPO:- I Am A Bit Bearish Inclined - 19/4/2010

This is really becoming a tough cookie as prices still whacking around without any real confirmation of a new direction. The ADX remains flat and so is the MACD limping forward flat. Both the Stochastic and MACD have gone negative which is telling us to keep an eye on the short side for the current time. I have drawn 2 horizontal lines to mark out the current range , breakout on either side may warrant more attention then. And I have also drawn a horizontal line at the D- peaks, if the next D- spike goes above the line, that may be confirming the return of a new trend.

Both the weekly chart indicators continue to deteriorate. The Stochastic may be falling through the 50's signal line which usually confirming a more concrete sell signal. You would want to keep an eye on the MACD too as it is already falling near its zero signal line, which is another major sell signal. The weekly ADX continues to stay flat which is reciprocalling the tightening Bollinger  Band, i.e. no trend in this market. As I said severally times  previously - the tightening Bollinger Band is so sweet. Big profitable move is ahead. So stay awake and sharp.

Someone were saying how the coming appreciation of the Chinese RMB , the exceptional weather, crude oil to hit 99.00 etc will bring CPO to 3,000, I personally do not really give a damn about these kind of stories which usually sound "logical" but almost never  play out. I only believe what I read from the charts. Frankly at this moment I cannot make out what this market wants to do next . On one hand there could be an inverted Head & Shoulder pattern which is super bullish. Then on the other hand, there could be an imperfect double tops pattern (8th. January high and 12th. March highs) which is super bearish. So again, I have to say this:- Let's wait out for another 1-2 weeks to see what happen next. 

But with all the daily and weekly indicators pointing down, I am beginning to get a bit bearish inclined.

KCPO:- Let's Wait And See Somemore 12/4/10

 

As I was saying last week that we should wait for 1-2 weeks to determine our next course of action. Last week prices broke below the lower Bollinger Band one day and then broke above it on another day, then came last Friday when the open and close action fully engulfed both the upper and lower Bollinger Band all in one day.

The Stochastic has turned positive again while the MACD seems to be struggling to do a positive crossing up. Maybe you want try your luck by buy in at 2596, but I would not commit a heavy sum as the ADX remains flat and the Bollinger Band continues to tighten, so we may expect this market to whip up and whip down again before the real direction emerges. Place stop at 2550.

 

The weekly chart remains bearish as the Stochastic is still falling and so is the MACD. As the ADX remains flat, Bollinger Band continues to tighten and prices stuck between the band, all of which are telling us that there is no directional trend in this market.

As last discussed last, I am getting very excited with the tightening Bollinger Band with low and flat ADX which are all classic signs that a violent major move will be coming  soon. But these do not foretell us which direction will the market next go. So we would have to look at other items to try to 'guess' educatedly on the market's next move. I mentioned here last there may be an inverted Head & Shoulder pattern forming , if that is true, then the next move should be a major up move when the neckline is broken up. But then we do not have any divergence to support this upside reading. So I would sit aside and wait for more evidence to emerge.

KCPO: - Something Big Is Coming 5/4/2010

 

Last week as all the indicators were falling into place and I was so confident that new bear trend is in place, then the market sideway for a while and then turned back upward to take out my stop on Friday. As price has now crossed above the lower Bollinger Band and with the Stochastic also crossing up above its 20's signal line, I would engage an initial long again.  Since the ADX has turned flat again, more attention should be paid to the Stochastic at this moment. I would only engage more position when the MACD turns positive. This is also noting the D- is still above the D+ which mean the bear is still around. Place stop at 2633.

 

The weekly chart remains bearish as both the Stochastic and MACD are still falling. With the weekly ADX has started falling again and prices remain inside the top and bottom bands, I think it will safe to conclude this market is caught in another tight range bounds. We should also pay attention to the tightening Bollinger Band  which is usually foretelling that a massive move is ahead.

So at present, just stick to small trades and wait for another 1-2 weeks to see how the weekly chart develops in order to capture the next big move.

KCPO:- Bears Back In Command ? 29/3/210

 
The market took out my stop on last Monday. As I was getting ready to go long again with price closed above the lower Bollinger Band and the Stochastic crossing up the 20's signal line on Tuesday, the following day's price failed to confirm the buy by hitting a higher high but instead went back down and closed below the lower Bollinger Band again. A new signal came in on Friday when price went below the lower Band and  lower than the recent low of 2549.

The daily chart is getting interesting as the negative  MACD has gone below its zero signal line. I usually take this as a more confirming sell signal. The D- remains above the D+, and a very interesting item has developed here is the ADX has risen and crossed above the falling D+, which by itself is a major sell signal. A rising ADX means a new trend in emerging, and I would wait for it to cross above its own 20's signal line and with that, I would add more shorts positions. As long as the ADX continues to rise, you can disregard the Stochastic which has fallen back the "oversold" zone. Remember: when there is a strong trend in the market, ignore those oscillators indicators and watch the MACD instead. I will also add on more sell when price breaks below its recent low of 2528. Place stop at 2568.

The weekly chart is finally come in agreement with the Stochastic falling and  the MACD has crossed down. Price has closed below the all important middle band which is the 20 periods moving average. But the D+ still maintain above the D- which is telling us the bull may be dying but still has some breath in it. I notice the Bollinger Band has begun to tighten which is telling us that a new trend is not yet in place. But a weekly closing of below 2445 may see a new trend setting in.

With the current strength of the US Dollars, most commodities will have a more bearish bias. At the moment the USD is near one of its near term upside target and may hover around here before going for its next targets of 83.70/89.60/100.00 (USD Index chart), so KCPO may just imitate that too before seeing a major move.

KCPO:- Trade On A Short Term Parameter 22/3/2010

The market continued to fall on last Monday , then held on there and then staged a bounce back on Friday.  Since the ADX has remained flat and below 20's level, I would pay more attention to the Stochastic which has now gone into the oversold zone. Other than that item, MACD continues its fall and may fall through its zero signal line; the D- is above the D+ and the Stochastic is still falling, all added to a bearish reading.

I would hold on to the shorts position and place a stop at 2585.

 

The weekly chart is turning negative as price has now closed below the upper Bollinger Band and the Stochastic has turned negative. This is flashing the first sell signal. The MACD though remain positive but has started to hook down. The weekly ADX has turned flat again which is telling us the prior smallish up trend has ended.

Since there is no major signal at the weekly chart yet, I will just trade the daily chart on its short term signals which is now on a sell mode. Watch the stops and be ready to switch side again since the daily ADX is low.

Since last Friday the USD is on the move again, it will be quite difficult to see KCPO going up now.

KCPO - Will it goes sideway or will it collapses here ? 15/3/2010

As I was thinking last week as both the indicators turned back in tune again, that this market should move higher more solidly. But instead the market turned shaky and gave way on Friday when it took out my stop.

The daily picture now has taken an ugly turn as the Stochastic has gone back to negative and failed to keep above its 80' signal line. The MACD may still be positive but has hooked down and turn negative soon. Price is now below the upper Bollinger Band, all these have offered me a reason to place an initial short position in. I am placing my stop at 2669. I would NOT engage any big position in yet as the ADX is below 20's and it is also falling. This means this market is not trending .

There is an interesting item found at the Stochastic as it has already formed a bearish divergence with the recent higher prices. Though I usually read divergences with MACD rather than from Oscillators, but since the Stochastic I applied here is of the slow default, I would keep an eagle eye on it. With many of the commodities have been falling recently, I suspect CPO may just follow suit.

The weekly chart seems to be supportive of a more bullish readings as the Stochastic continues to rise and so is the MACD. Price still manage to stay above the upper Bollinger Band and the D+ is above the D-. All warrants a bullish reading. Even the ADX is supportive by continuing its ascent.

Last week there were some analysts talking about CPO at 3,000. Actually the daily chart seems to be forming a rare inverted head and shoulder which is extremely bullish. If this holds true, then what is 3,000 as we may see much higher. But I cannot find other bullish item to support this (like a bullish divergence at MACD), so at this moment, I am not sure of what it will do next. So for the moment, I would just react to any new trading signal until I can find more complimentary signals.

FCPO:- Little Bull May Has More Strength 8/3/2010

The little bull still has some strength. It took out my earlier shorts and moved back to new longs when the Stochastic crossed up again.The MACD continues its upmove . An interesting item here would be the ADX which has begun to rise. But as it is still below the 20's signal line, I would suggest you keep an eye on the Stochastic and get ready to take profit at the slightest hint. A logical place to put stop is 2639.

 
The weekly chart is turning more positive as price stays above the upper Bollinger Band. The Stochastic has turned positive and so is the MACD. The weekly ADX has started to rise  and is about to go above the 20's signal line. This could mean the bull may turn even stronger soon.

As the USD may has come to a temporary top for the time being, we may see some of the commodities go back up.

KCPO - Do only short term trading -1/3/2010

The market gone overbought and fell on last Thursday. Since it closed below the upper Bollinger Band, I would had taken out all my prior long positions. The Stochastic has not yet crossed down its 80 signal line and when it does, i would start selling. The MACD , too has not crossed down and the D+ still stay above the D-. Once all these come in place, I would move in too. The daily ADX stay flat and below the 20's signal line, so I would use the Stochastic as a confirming tool to trade for the moment.

 

The weekly chart's Stochastic has begun to hook up though it still remain negative. so is the MACD. Though 2 weeks ago, we had price closed above the upper Bollinger band, last week, price flipped again and closed back below the upper Bollinger Band. All these are not telling us anything concrete yet. But one interesting item is the weekly ADX which has now begun to rise and crossed up the falling D-, normally I would be very excited about it, but since I still do not have parallel confirmations from the other indicators, so I would want to watch for another week before deciding what to do next.

One of the gospel truth about trading is that "when we are not sure about the market, we should stand aside". The market will always be there, so what is the hurry ? For the moment, I would sell the market when the daily Stochastic crosses down its 80's signal line or the MACD crossed down its moving average. Place stop at 2609. Or I would buy again if closes above 2609 and place stop at 2603.

FCPO :- It is also about waiting 22/2/2010

The daily ADX continues to fall  and stay below 20's indicating a minor / trendless mode. With this, I would pay attention to the Stochastic rather than the MACD. The Stochastic has already gone into the overbought zone, so I would suggest you should take some profit off the table. For the balance, place stop at 2506 and I would also start selling if price closes below that level.

 

The weekly chart stays almost the same as last week. The MACD remains positive but the Stochastic is not, though it is now trying to do a cross up. Price has managed to close above the upper Bollinger Band again and the D+ seems to be expanding upward. Both of these are of bullish bias. I would watch the D+ to cross up above the red color horizontal line I drawn to mark its prior peak to confirm a new bullish trend. As mentioned last week, CPO seems to be forming an inverted Head & Shoulder pattern which is usually extremely bullish. But I need to see more confirmations on this one.

As last week the market was still in a holiday mood, let's see what the coming week will bring.

KCPO:- Take profit first 15/2/2010

Both the MACD and the Stochastic have been rising. The MACD is now crossing its zero line which is usually a more bullish signal, but as the ADX has been falling (means little trend) and now it is now crossing down the 20's signal line which is now adding more weight to a sideway or smallish trend mode. So I would
pay more attention to the Stochastic which has now reached the overbought zone. You should also take note that it had reached 2594 which is near to the 61.8% retracement level. So I would place stop at 2542 to protect profit. Sell new shorts at 2540.

 
The weekly chart is confirming the lack of significant trend in the daily chart as the Stochastic keeps falling while the MACD stays positive. The 2 main indicators are contradicting each others. The weekly ADX is still flat and below the 20's signal line. I have marked out a short horizontal line marking out the prior peak of D+, if the the D+ goes above this line, then maybe we should see a trend formed. By then we should see price crossed up above the upper Bollinger Band which should provide a new buy signal.

I cannot say for sure what is going to happen to CPO next. But I notice there may be a possible massive inverted Head & Shoulder Pattern in formation. This is usually an extremely bullish formation. But this cannot augur well with  the current strength of the USD. Maybe I would wait for another 1-2 more weeks before educatedly trying to read what would its next move.