Maintain long positions as rebound is still developing. The FCPO performed positively in its latest session. Intraday tone was constructive as the commodity generally moved higher for the entire session. The low and high were at MYR1,979 and MYR2,014, and it closed MYR10 higher at MYR2,005. We still see a deeper rebound developing, after it recently reached the low of MYR1,940 – which saw its daily RSI hit the oversold threshold. Towards the upside, once the recent sessions’ consolidation phase is completed, the commodity should test both the 30-day and 50-day SMA lines. Hence, we are keeping our positive trading bias.

As the probability is tilted towards a deeper rebound, traders should remain in long positions. We initiated these at MYR2,057, or the closing level of 22 Nov. A stop-loss can be placed below MYR1,940.

We maintain the immediate support at MYR1,940, the low of 27 Nov. Breaking this may see the market test 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 - 7 Dec 2018