CPF : Outlook for Feb 21st

The AGRI sector is a step or two behind most other major volume sectors on the SET, which is a bit of a surprise given the rather hefty rise in agricultural commodity futures over the past several weeks. Maybe it has to do with Thailand’s penchant of price fixing and state intervention in the agri markets, but regardless of such meddling, food prices are set to rise on a long term basis, and will only soften if weather patterns turn from what has been ‘a perfect storm’ over the past 6 months to a period of ‘perfect crop weather’ – not just in Asia, but globally.

CPF in our view will hit 45-50 within a couple of years if not sooner, but for the very near term the 22.00 to 22.40 resistance is the first barrier for the stock, which should be tested early in week. When the stock manages to pass 22.40 it will move with a tad more vigor than seen of late, with a worst case scenario for the next few hours of trade being a dip to close the gap to 21.50. (If so buy if not already long)

A breakout above 22.40 places 22.90-23.00 as the target, so consider a punt even from 21.7 for a few percent this week.

 

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