Last year we bemoaned the collapse of crude oil prices as well as the depressed CPO prices. Well, things are changing for better. In Chart 1, you will see WTIC is clearly on an uptrend after it broke above its long-term downtrend line, RR at USD40 in April this year.
Chart 1: WTIC's weekly chart as at Aug 18, 2016 (Source: Stockchart.com)
The real surprise is the sharp rally in CPO in the past 4 weeks. CPO rose from a low of RM2270 to touch a high of RM2950. The rally was so sharp that it went above the upper line (AC) at RM2830 of the "expanding triangle" (ABCD). Such sharp rallies must consolidate before they can go higher. If CPO can consolidate at RM2830, it can continue its uptrend from there.
Chart 2: CPO's weekly chart as at Aug 18, 2016 (Source: ifs.marketcenter.com)
Based on the recovery in crude oil & CPO prices, our O&G stocks and plantation stocks can recover further.