Maintain long positions as deeper rebound is likely developing. The FCPO formed a white candle in the latest session. The commodity generally moved higher for the entire session with the low and high registered at MYR1,966 and MYR2,017, before settling the session MYR48 higher at MYR2,014. This means the commodity posted a second consecutive white candle, after testing the immediate support of MYR1,940 in the prior session. This is an early indication that a deeper rebound may be taking place. The bias for a deeper rebound to develop is based on the fact that the commodity’s retracement over the recent weeks have been stretched, with its daily RSI reading falling into the oversold threshold recently. Based on this, we maintain our positive trading bias.

With the commodity starting to show signs of developing a deeper rebound, traders should remain in long positions. We initiated these positions at MYR2,057, or the closing level of 22 Nov. A stop-loss can be placed below MYR1,940.

Towards the downside, the immediate support is set at MYR1,940, the latest session’s low. This is to be followed by MYR1,863, the low of 25 Aug 2015. Moving up, the immediate resistance is set at MYR2,066, the high of 16 Nov. This is followed by MYR2,137, the low of 20 Sep.

Source: RHB Securities Research - 29 Nov 2018