Palm Oil Futures (FCPO) Technical Analysis: A Short-Term Bearish

The analysis did not align with initial expectations. It was anticipated that the weekly chart of the FCPO1! continuous contract would stabilize around the 4500 support level, but this week it dropped to 4374. From the weekly chart perspective, while the 4500 level has been breached, the overall upward trend structure remains intact. The next support level will likely be around 4120. If this level is also breached, it will be necessary to reassess whether the major trend has shifted from bullish to bearish.

Looking at the FCPO1! daily chart, the overall trend leans bearish. A clear double top can be observed, along with a neckline breakout, a retest of the resistance line, and a distinct downward wave. Although there may be some support around the 4250 level, it is unlikely to be strong support, as both the weekly and daily charts of the March contract do not indicate any significant support at this level.

By referencing both the March contract and the continuous contract, the next strong support level should be around 4120–4150. As long as this support level holds, I consider the trend to be long-term bullish but short-term bearish.

Based on the daily chart trend of the March contract, it is likely that prices will decline in the short term to test the 4120–4150 support level. Therefore, I believe this is a good opportunity to enter a short position on the spread.

Currently, the support level for MAR25-JUN25 is around 240 points, with the next support level at 190–200 points if 240 is breached. If an entry can be made above 250 points on Monday, each contract is expected to yield a 50-point profit, amounting to RM2,500 in total.