“Bullish Harami” formation is confirmed; initiate long positions. Yesterday, the FPCO formed a white candle that breached above the previous immediate resistance of MYR2,186 – thus confirming the “Bullish Harami” formation highlighted in our previous report. For the intraday, it registered a low and high of MYR2,178 and MYR2,218, before closing MYR40 higher at MYR2,211. The confirmation of the “Bullish Harami” came after the commodity’s recent months’ retracement reached an oversold situation, with daily RSI hitting a low of 22.4 on 13 Jul. This confirmation means the said retracement has ended. The commodity is now likely to – at the minimum – chart a rebound. On this, we revise our near-term trading bias to positive.

Our previous short position – initiated at MYR2,204, the closing level of 11 Jul – was closed out at MYR2,186 in yesterday’s trading. As a rebound is likely to develop, we now initiate long positions on the commodity at yesterday’s closing level. For risk management purposes, a stop-loss can be set at MYR2,144.

The immediate support now may be found at MYR2,144, the low of 13 Jul. This is followed by MYR2,100, the next round figure. On the other hand, the immediate resistance is now at MYR2,272, the high of 10 Jul. The second resistance is pegged at MYR2,348, the high of 29 Jun.

Source: RHB Securities Research - 19 Jul 2018