Maintain long positions as the commodity is likely just taking a breather. The FCPO closed yesterday’s session negatively. For the intraday, it generally moved lower, ranging from a high of MYR2,064 to a low of MYR1,988, before ending at MYR2,000 to mark a decline of MYR40. Consequently, a “Bearish Engulfing” appeared. This could be a signal that its recent sessions’ rebound may be paused. Broadly, we believe its rebound from the low of MYR1,940 on 27 Nov is still ongoing. Once this breather ends, we expect the commodity to challenge both the 30-day and 50-day SMA lines. Hence, we are keeping our positive trading bias.

As the latest weak session is a sign of a minor consolidation and does not affect the bias for a deeper rebound to develop, 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.

Immediate support is expected at MYR1,940, the low of 27 Nov. The following support is at MYR1,863, the low of 25 Aug 2015. On the other hand, 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 - 4 Dec 2018