Stay long, with a stop-loss set below the MYR2,038 support. The upward movement of the FCPO continued as expected, as another white candle was formed yesterday. It rose MYR8 to close at MYR2,172, after oscillating between a high of MYR2,184 and low of MYR2,154. Market sentiment is considered bullish, as the commodity formed a white candle for the third consecutive session. This can also be viewed as a continuation of the bulls extending the buying momentum from 18 Mar’s upside gap. Overall, we believe the rebound that started from the recent low of 15 Mar would likely continue in the coming sessions.

According to the daily chart, we anticipate the immediate support level at MYR2,038, which was the recent low of 15 Mar. The next support would likely be at MYR1,940, determined from the previous low of 27 Nov 2018. Towards the upside, the immediate resistance level is seen at MYR2,217, ie the high of 4 Mar. Meanwhile, the next resistance is maintained at MYR2,278, obtained from the high of 25 Feb.

Therefore, we advise traders to stay long, following our recommendation of initiating long above the MYR2,164 level on 21 Mar. In the meantime, a stop-loss is preferably to set below the MYR2,038 threshold in order to minimise the downside risk.

Source: RHB Securities Research - 22 Mar 2019