CPO Futures trading on Bursa Malaysia Derivatives pushed 200 over points above 3700 but sold down 150 over points from the new high of the year in such a short period may indicate that the high volatility of crude palm oil futures will drive players to trade more aggressively.
As the change of month with big discount after expiry of December contract month, the cpo hourly indicator will be much affected with selling 3719 in February contract month incur an extra artificial profit overnight from the March contract month if we just blindly follow the 3rd Active contract month. Therefore, when indicator turns buy again, the short position in February contract must be covered in February contract, not March contract only; otherwise, the position will become a spread position.
If the profit is huge for the selling based on the hourly indicator, the palm oil market looks "toppish" for the next 2 weeks, and further sell down is possible.