KUALA LUMPUR: OSK Research said the crude palm oil (CPO) market had on Monday, Oct 11 experienced the most important technical breakout since December 2008.

"Remember all the short-term up and down cycles experienced by the market after the prices hit the peak in May 2009? During this period of time, the market had actually gone through months of consolidation. As a result, a massive "Ascending Triangle" has been constructed," said the research house in its technical outlook for Tuesday, Oct 12.

OSK Research said the resistance line of the "Ascending Triangle" was eventually violated on Monday after experiencing no less than seven failed breakout attempts since May 2009. The breakout from the tough RM2,700-RM2,800 / tonne resistance zone basically signals the end of the market's many months of consolidation phase.

The research house said that means, after Monday's major breakout, the prices should start extending its mid-term uptrend after being stuck at around the RM2,000 to RM2,800 a tonne level for more than a year.

It was a major breakout which has already substantially improved the futures market's technical landscape. Both near-term and mid-term technical outlook of the CPO market are now aligned with a bullish bias.

OSK Research said from the current level, now look for the psychological RM3,000 a tonne level as the immediate resistance. The next hurdle is detected at the RM3,320 a tonne level.

To the downside, now look for an initial strong support at the RM2,760 to RM2,903 a tonne level which is created by the "Upside Gap" on Monday. Another support is situated at the RM2,736 a tonne level.