The plantation index

Bursa Malaysia Plantation Index gained 99 points (+1.14%) today to close at 8,836 level. The index has added 352 points or 4.14% during the 7 trading days in July. The strong performance could due to the surge in the Soybeans price.

During the first 6 trading days in July, soybeans price runs from a low of $1400 on July 2 to a high of $1570 (intra-day high) on July 9 for a 12% gain.

As expected, the CPO price moved in tandem with the soybeans price as shown above.

My wave count for the plantation index remained the same. Since the 2009 low that marked the end of major wave 4, the index has completed 5 waves, i-ii-iii-iv-v, with the potential of ending the major wave 5 at 8925 level to complete the mega wave (III).

However, if the soybeans price continues to move higher and the CPO price moves in a similar way, the major wave 5 may have 9 waves.  The 18th May's low of 8104 can be the wave vi and the current run-up can be the wave vii of major wave 5 as shown below. But the index will have to break its previous high of 8925, another 89 points to go. 

 

Roubini's perfect storm for the global economy may be unfolding, there is still times for a last surge for soybeans, CPO and plantation stocks. One thing is for sure, the risk is getting higher, be prepared to cut and run for your life, if you are caught on the wrong foot. Remember the October 1987 'Black Monday'.




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