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I am still bullish on the long term fundamentals of crude palm oil. The more robust demand for the vegetable oil in emerging economies, especially in China and India, will provide a floor to any correction in price.A correction? Yes, prices do not go up in a straight line. If prices do move higher, they climb a wall of worries.
The share price of Golden Agriculture is finding it hard to move higher than 68.5c in recent sessions. If we take a look at the daily chart, it becomes clearer why this is so. 68c is where we find the merged 20d, 50d and 100d MAs.
Volume has been relatively thin and we have to bear in mind that share price is moving closer towards the apex of a symmetrical triangle. If volume does not increase with an accompanying push to move price higher, we might see support at 66c broken and price moving lower.
If price were to retest support at 66c, I could buy more shares in the company but it would be a smallish purchase in case price were to move higher. A trend is not over until it is over, after all. In the meantime, keep an eye on the strong resistance at 68.5c. If that were to be taken out convincingly, we could see 70c next.
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