Consolidation phase may have reached an end; maintain long positions. The FPCO formed white candle, closing MYR40 higher at MYR2,153 – the low and high were at MYR2,124 and MYR2,154. The strong daily performance has likely marked an end to the commodity’s over one-week’s consolidation phase (in the form of a deep retracement). This suggests the probability is high that its rebound leg, which started from the low of MYR2,038 on 15 Mar, is resuming. Towards the upside, we are still expecting the 200-day SMA line to be tested. Based on these observations, we are maintaining our positive trading bias.

Given that the rebound is likely to resume towards the said SMA line, we continue to recommend that traders stay in long positions. These were initiated at MYR2,164, which was the closing level of 21 Mar. A stop-loss can be placed below MYR2,038.

The immediate support is eyed at MYR2,038, the low of 15 Mar. This is to be followed by MYR1,940, the low of 27 Nov 2018. Moving up, the immediate resistance is expected to emerge at MYR2,217, the high of 4 Feb and near the 200-day SMA. This is followed by MYR2,278, which was the high of 25 Feb.

Source: RHB Securities Research - 3 Apr 2019