• FCPO slid for the 3 rd straight losses. On the back of toppish technicals, FCPO eased RM25 to record its 3 rd consecutive decline to RM2711 (falling 2.5% from 3M high of RM2782 on 24 Aug) amid stronger RM, lower rival edible oil prices and long holidays ahead. Despite yesterday’s decline, FCPO still grew 1.3% in Aug after surging 9% in July, riding on the expectations of slower output in the coming months and steady rival edible prices coupled with Malaysia/Indonesia talks on possible biodiesel program in China.

• Short term profit taking pullback to neutralize overbought position. On the back of weakening daily chart and overbought weekly slow stochastic indicator and extended holidays ahead, FCPO may continue its profit taking consolidation in the near term with crucial supports at 2677- 2700 levels. Having said, LT uptrend remains intact unless the 30-w SMA support near 2645 zones is broken decisively. Key resistances are 2733 (76.4% FR), 2750 and 2782.

Source: Hong Leong Investment Bank Research - 30 Aug 2017