Maintain long positions as the bulls are still defending the trailing-stop. The FCPO ended the latest session marginally lower, and during the intraday tested the trailing-stop (MYR2,288) of our long positions. At the closing, it eased MYR4 to end at MYR2,299. The low and high were at MYR2,286 and MYR2,303. The ability of the commodity staying above the said trailing-stop suggests the risk of the FCPO experiencing a deeper retracement is relatively low, for now. The latest three sessions’ price actions are suggesting it is undergoing a relatively shallow consolidation phase – this comes after its prior multi-week’s rally that sent the daily RSI reading to the overbought threshold. As such, we keep to our positive trading bias.

As the bulls are still present, traders should stay in long positions. We initiated these at MYR2,226, the closing level of 18 Jan. To manage risks, a trailing-stop can be placed below MYR2,288, the low of 25 Jan.

The immediate support is set at MYR2,200, a round figure. This is followed by MYR2,134, the low of 14 Jan. Conversely, the immediate resistance is at MYR2,348, the high of 29 Jun 2018. This is followed by MYR2,400, a round figure.

Source: RHB Securities Research - 4 Feb 2019