RM3,833 And Still Slipping? Analyst Says Palm Oil Needs A Push Above RM4,000
27/05/2025 (Business Today) - RHB Investment Bank Bhd (RHB Research) has reiterated its bearish outlook on the crude palm oil futures (FCPO) market, as prices continued to trend sideways with technical indicators showing limited upward momentum.
On Monday, the benchmark FCPO contract edged up by RM2 to close marginally higher at RM3,833. The contract opened at RM3,837 and moved within a narrow range, touching an intraday high of RM3,837 and a low of RM3,774 before ending with a moderate bearish candlestick pattern.
Despite the minor rebound, RHB Research noted that the overall technical setup remained weak. The commodity continues to trade below both its 50-day and 200-day simple moving averages, with both indicators trending downward. The Relative Strength Index (RSI) also hovered below the 50% threshold, signalling capped bullish strength.
“As long as prices stay below the RM4,000 resistance level, the bears remain in control,” the research house said. It maintained its short position recommendation, initiated at RM4,328 (closing on 4 April), citing no signs of a recovery at present.
For risk management, RHB Research recommends a stop-loss level at RM4,000. Immediate support is seen at RM3,700, followed by a lower support level at RM3,500. On the upside, resistance levels are placed at RM4,000 and RM4,100 respectively.
The cautious stance comes amid ongoing market uncertainty and weak technical signals, with traders advised to stay on the defensive.