Maintain long positions. The FCPO formed a second consecutive “Upside Gap” yesterday and tested the immediate resistance of MYR2,265. The low and high were at MYR2,244 and MYR2,269, before it ended MYR37 higher, at MYR2,263. The positive session suggests there was a positive follow-through from the previous upbeat session, when the commodity broke the previous immediate resistance of MYR2,202. The 30-day SMA line which has crossed the 50-day SMA line, both of which are also turning upwards, also indicates that the tone is positive. The rebound that started from the low of MYR1,940 on 27 Nov 2018 has not been stretched yet, given the daily RSI reading of 68.9. As such, we keep to our positive trading bias.

As the trend remains bullish, traders can stay in long positions. We initiated these at MYR2,226, the closing level of 18 Jan. For risk management purposes, the stop-loss is now revised to the breakeven level.

Immediate support is expected at MYR2,134, the low of 14 Jan. This is followed by MYR2,093, the low of 26 Dec 2018. Moving up, the immediate resistance is set at MYR2,265, the high of 17 Oct. This is followed by MY2,303, the high of 5 Sep 2018.

Source: RHB Securities Research - 23 Jan 2019