Bursa Malaysia Plantation Index managed to close higher than its January 2008's historical high of 8822 (closing price) on last Wednesday. It closed at 8823, 8844 and 8843 on Wednesday, Thursday and Friday respectively.
Whether this is going to be the end of the wave 5's run that started from 6707 level in September 2011? It has to depend on whether the prices of CPO can move higher.
Looking at the above CPO monthly chart, one will notice that the current CPO price of around 3366 is much lower than its February 2011 high of 3801 but the plantation index of 8843 is much higher than its February high of 8301, it is a divergence, unless the CPO price can move up strongly from here to break its 3801 level. Its possibility depends on the Soybeans price movement.
Soybeans price moved very close to its February 2011 and August 2011 high of 1455. It set an intraday high of 1450 on last Tuesday. It was unable to move higher on the following 3 trading days. If it fails to break the 1455 level and instead if it starts to move lower, one possible wave count is as shown above.
Once the Soybeans starts to move lower, I will expect the CPO to follow. Under this circumstances the Bursa Malaysia Plantation Index is likely to form a 'Double Top' reversal pattern and starts to come down very fast.
Can Soybeans break the 1455 level? Just wait and see.
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