Continue to stay in long positions given that the bulls are still in control. The FCPO registered a MYR14 loss to MYR2,277 yesterday. As a result, a black candle was formed and the commodity is currently situated near the MYR2,272 support. However, this weak performance does not pose a threat to our positive view. This is given that no strong downside development has been sighted yet. At this juncture, we believe that the bulls are still in control over the bears. Our positive view is also supported by the “Upside Gap” in the daily chart above, which suggests more potential upside movement ahead.

In line with our positive expectation, it is best that traders maintain their long positions. We advise setting a stoploss at MYR2,176, so that the trading risk is kept at a minimum. For the record, we initiated the long at MYR2,211, which was 18 Jul’s closing level.

We set the immediate support at MYR2,272, derived from the high of 10 Jul. Should the FCPO slip below this level, the next support is set at MYR2,176, which was the low of 31 Jul. Conversely, our immediate resistance is maintained at MYR2,348, or the high of 29 Jun. This is followed by the next resistance at the MYR2,395 threshold, located at the low of 30 May.

Source: RHB Securities Research - 7 Sept 2018