Still looking to break 50-day SMA line; maintain long positions. Last Friday, the FCPO failed to maintain its early positive momentum that saw it approaching the 50-day SMA line. The session’s low and high were recorded at MYR2,225 and MYR2,260, before it closed at MYR2,242 to reflect a MYR4 decline. Despite the latest weak performance, its positive bias remains valid. We believe the latest three sessions’ price actions indicate that the commodity is consolidating below the 50-day SMA line, thereby creating a base to test the said SMA line. Hence, we maintain our near-term positive trading bias.

As long as the immediate support of MYR2,176 is not breached, chances are high that the FCPO be able to breach above the 50-day SMA. We still recommend that traders maintain long positions – initiated at MYR2,211, or the closing level of 18 Jul. For risk management purposes, we revise the stop-loss to MYR2,176.

Immediate support is pegged at MYR2,176, the low of 31 Jul. The second support is at MYR2,140, the low point of 25 Jul. Towards the downside, the immediate resistance is pegged at MYR2,272, or the high of 10 Jul. This is followed by MYR2,348, the high of 29 Jun.

Source: RHB Securities Research - 13 Aug 2018