The CPO: There has been six major failed breakout attempts at around the RM2,700 to RM2,800 area since April 2009. Hence, whether or not the price could surpass this tough resistance area would determine whether the current rally can be sustained. The latest failed breakout attempts two months could have led to a deeper correction for CPO prices. Nevertheless, the market managed to reverse the correction phase lon Aug 2010 and now (13 Sept 2010) it looks like the futures market is going to test the RM2,700 to RM2,800 a tonne area for the seventh time since April 2009.
A convincing break above the RM2,800 a tonne level would trigger a very important breakout signal. Such a breakout is expected to substantially improve the market’s mid-term technical outlook. Immediate resistance at the RM2,700 to RM2,800 tonne area. To the downside an immediate support at the RM2,486 a tonne level, followed by the RM2,393 per tonne level.
The Beneficiaries …. TH Plantations, Sime Darby, PPB, Kulim, Genting Plantations, IOICorp
The Steel Industry: In an unprecedented move, the Chinese Government is implementing a series of power cuts across major industries, including the steel industry. Such a move forms part of China's concerted efforts to meet its energy-efficiency targets - and help pare China's steel supply by 9.6% for the rest of 2010. As things stand, latest data released by the National Bureau of Statistics indicated that China's crude steel production has already fallen 1.1% YoY in August 2010 to 51.6 million tonne - the first monthly drop in 2010. Going forward … China's continued efforts to crimp supply should set the stage for a stronger recovery in steel prices moving into 4Q10.
The Beneficiaries … Lion Ind, Kinsteel, Perwaja, Ann Joo
Offshore Trading Of Ringgit: Prime Minister Datuk Seri Najib Razak had said in an interview with CNBC on 12 Sept 2010 that the Government was open to allowing the ringgit to trade offshore.
