Highlights

RHB Retail Research

Author: rhboskres   |   Latest post: Fri, 15 Jan 2021, 6:18 PM

 

FCPO - Breaches Support Level

Author:   |    Publish date:


Triggers stop-loss; move into short positions. The FCPO fell MYR58.00 to settle at MYR3,227 on Thursday, breaching the support level of MYR3,240. The commodity initially saw a strong opening, gapping MYR8.00 to open at MYR3,293. Despite the strong opening, the bulls were jittery and dumped the commodity towards the day’s low of MYR3,217. With the latest negative price action, coupled with the RSI indicator moving in a downtrend mode, we believe the bullish trend is taking a pause and the corrective phase has started. The latest price correction may at least see the commodity drift lower to test the next support level of MYR3,182. Since the momentum has waned, and the support level is breached, we switch to a negative trading bias.

Our previous long positions – initiated at MYR3,326, or the closing level of 23 Nov – were closed out at MYR3,240 after triggering the stop-loss. Concurrently, we initiate short positions. To manage risks, a stop-loss can be set above the MYR3,332 mark.

The immediate support is set at the recent low of MYR3,182, followed by MYR3,135. Towards the upside, the immediate resistance is pegged at the round figure of MYR3,300, followed by MYR3,332.

Source: RHB Securities Research - 2 Dec 2020

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