• FCPO climbed RM16 wow to RM2416. A confluence of negative headwinds amid nagging concerns of rising inventory amid production surplus in a seasonally strong Apr-Sep period and the resumption of 5% export tax effective May 2018 saw FCPO plunged 6.2% from Apr high of RM2510 (6 Apr) to a low of RM2354 (17 Apr). However, an oversold rebound witness the index jumped 2.6% to end at RM2416 last Friday.

• Extended range bound consolidation unless daily mid Bollinger band near RM2430 is taken out. The bottoming up hourly chart and a bullish daily engulfing candlestick on 17 Apr could indicate potential downtrend reversal from monthly low of RM2355. A successful breakout above RM2430 will lift prices higher towards RM2455 (50d SMA) and the long term resistance at RM2473 (200w SMA). On the flip side, a breakdown below RM2380 (12 Apr low) could see more retracements towards RM2354 levels.

Source: Hong Leong Investment Bank Research - 23 Apr 2018