Maintain long positions as a deeper rebound is developing. The FCPO formed a white candle in the latest session to settle MYR20 higher at MYR2,020. The session’s low and high were recorded at MYR1,997 and MYR2,037. The positive session suggests that there is no negative follow-through from the “Bearish Harami” formation, which appeared on 3 Nov. Broadly, we continue to see the commodity in the midst of developing a deeper rebound that started from the low of MYR1,940 on 27 Nov. This rebound phase was triggered after the commodity experienced a steep multi-week steep retracement, which saw its daily RSI fall into an oversold threshold in the mid of November. Hence, we are keeping our positive trading bias.

As chances are high that this ongoing rebound could, at the minimum, test both the 30-day and 50-day SMA lines, 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.

The immediate support is set at MYR1,940, the low of 27 Nov. This is followed by MYR1,863, the low of 25 Aug 2015. Conversely, 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 - 5 Dec 2018