Maintain long positions as the SMA lines are still standing. The FCPO formed a black candle in the latest session, indicating that the bears were in control. The session’s low and high were posted at MYR2,224 and MYR2,248, before closing at MYR2,239, this implies a decline of MYR22. Despite the weak session, the 30-day and 50-day SMA lines are still holding up. This signals that the risk of the rebound reaching its end, is relatively low. Should these SMA lines be broken, the risk of the YTD negative price trend resuming would be higher. Until this happens, we maintain our positive trading bias.

As there are no signs of the rebound reaching its end, we continue to recommend traders keep to long positions. To recap, we initiate these positions at MYR2,244, or the closing level of 16 Oct. For risk management purposes, a stop-loss can be placed below MYR2,153.

Towards the downside, the immediate support is set at MYR2,153, the low of 11 Oct. The second support is at MYR2,137, the low of 20 Sep. On the other hand, the immediate resistance is set at MYR2,303, the high of 5 Sep. This is followed by MYR2,348, the high of 29 Jun.

Source: RHB Securities Research - 19 Oct 2018