Initiate long positions as the bulls are extending the corrective rebound. The FCPO lifted by MYR2 to close at MYR2,244 yesterday – it successfully breached above both the 30-day and 50-day SMA lines, as well as the previous immediate resistance of MYR2,235. The session’s low and high were at MYR2,237 and MYR2,257. The breach of the said SMA lines and the previous immediate resistance have invalidated our previous bias that the commodity was in the process of resuming its YTD negative trend. Instead, its technical rebound that started from the low of MYR2,137 on 20 Sep is extending. Thus we switch our trading bias to positive.

Our previous short positions, initiated at 8 Oct’s closing level of MYR2,187 were closed out at the latest session. On our new trading bias, we initiate long positions at the latest closing price. For risk management purposes, a stop-loss can be placed below MYR2,153.

Immediate support is now set at MYR2,153, the low of 11 Oct. This is followed by MYR2,137, the low of 20 Sep. Towards the upside, immediate resistance is now expected to emerge at MYR2,303, the high of 5 Sep. The following resistance is at MYR2,348, the high of 29 Jun.

Source: RHB Securities Research - 17 Oct 2018