• In July, FCPO surged RM220 or 9% to RM2655 on the back of strength in other edible oils and tracking stronger export data from cargo surveyors. Sentiment was also boosted by forecast of potential slower-than-expected rise in July production.

• Technically, the bullish double-bottom pattern (daily chart) and the successful recapture of LT support trendline (weekly chart) augur well for FCPO’s strength. We remain optimistic that after a brief pullback to neutralize overbought daily stochastic, FCPO may retest RM2700 (psychological barrier), RM2724 (38.2% FR) and RM2750 (50-w SMA) targets in the mid to long term. Conversely, failure to hold at immediate support of RM2543 (30-h SMA) will witness prices to retreat back towards RM2610 (23.6% FR) and RM2588 (14-d SMA) levels.

Source: Hong Leong Investment Bank Research - 1 Aug 2017