CPO set for further volatile trade23/7/01(The Star) - CRUDE PALM OIL futures prices at the MalaysiaDerivatives Exchange (MDEX) resumed its bullish momentum last week andrebounded sharply in early trading, but the upward rally fizzled as theOctober contract failed to hold successfully above the RM1,200 per tonnelevel and encouraged many long position holders to realised their windfallprofits.The October futures contract was lifted from a weekly low of RM1,026 tofresh contract highs at RM1,238 and returned a large portion of itsearlier gains to settled the week higher at RM1,145, up RM65 per tonnefrom a week ago.Based on chart, the October futures prices are set for more wide range andchoppy trading and volatility would likely reign this week considering thelarge amount of short-term money moving in and out of the market motivatedby short-term ideas recently.

Cautious speculators should be extremely cautious and choose to ride withthe waves of the market rather than against.Keeping tight stops is one sure way of surviving in this sort of rollercoaster market conditions.An important chart support is seen for this week at the RM1,120-RM1,130levels.Violation of this chart support would signal the start of a downwardcorrection and send the market lower for a test of its minor chart supportat the RM1,060-RM1,040 levels.Chart resistance for this week stands at the RM1,190-RM1,170 levels.The 12-day exponentially smoothed moving-average price line (ESA) expandedon its upward trend and closed higher RM1,075.Based strictly on the ESA-lines, the immediate market has a cycle supportat the RM1,075 level.Technically, the daily stochastics has triggered the sell signal on Fridayand signalled that a downward adjustment has started.The oscillator per cent K closed the week below the oscillator per cent Dand settled lower at 66.01% and 75.71% respectively.Analysis of the stochastics suggests that the market could move into adownward correction this week.The daily Momentum Index (MI) has indicated that a trend reversal hasbegun.The MI closed the week above the 100-point mark at 129.40 points.The Moving-Average Convergence/Divergence (MACD) remained constructive forthe immediate term market and closed Friday positive.The MACD and the trigger-line finished the week sharply higher at 87.74points and 84.33 points respectively