Initiate long positions on possible price reversal. The FCPO ended the latest trading on the strong side Consequently, a “Bullish Engulfing” pattern was formed – indicating a possible price reversal, after the commodity experienced a sharp retracement in the past four weeks. The intraday tone was positive, as the commodity generally trended higher. The low and high were posted at MYR2,127 and MYR2,198, before ending at MYR2,189, indicating a gain of MYR68. The said price reversal pattern is indicative that the multi-weeks have likely reached an end, and the commodity is now ready to, at the very minimum, pose a deeper rebound. Trading bias has turned positive.

Our previous short positions, which were initiated at MYR2,290,or the closing level of 8 Feb, were closed out in the latest session. On the bias that the commodity is, at the minimum, developing a deeper rebound, we initiate long positions at the latest closing. To manage risks, a stop-loss can be placed below MYR2,093.

The immediate support is maintained is at MYR2,093, the low of 26 Dec 2017. This is followed by MYR1,940, the low of 27 Nov 2018. On the other hand, the immediate resistance is now set at MYR2,278, the high of 25 Feb. This is followed by MYR2,344, which was the high of 7 Feb.

Source: RHB Securities Research - 4 Mar 2019