Maintain long positions as the bias for a deeper rebound remains valid. The FCPO ended yesterday session negatively. It closed MYR25 weaker at MYR1,995 – this was after it swung between a low and high of MYR1,990 and MYR2,015. The negative session can be taken as part of the commodity’s consolidation phase, which started from the appearance of the “Bearish Engulfing” formation on 3 Nov. This ongoing consolidation phase was triggered after the commodity rebound rather strongly from the MYR1,940 support in the previous week. Once this consolidation phase is ended, we expect the commodity to test both the 30-day and 50-day SMA lines. Based on these, we are keeping our positive trading bias.

As the commodity’s ongoing rebound is merely taking a pause, before the next possible up leg, 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 low of 27 Nov. The second 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 - 6 Dec 2018