Maintain long positions as the bulls are attempting another breakout from the 200-day SMA. The FPCO chalked a positive performance yesterday and, in the process, tested the 200-day SMA line. The session’s low and high were registered at MYR2,164 and MYR2,182, before it closed at 2,175, indicating a gain of MYR22. As the commodity is now trading near the said SMA – which is also our minimum target, price actions in the coming sessions would be critical for fresh trading signals, ie an extension of rebound or a price retracement. For now, we are keeping our positive trading bias.

As the commodity has not recorded a price rejection from the said SMA, we continue to recommend that traders stay in long positions. These were initiated at MYR2,164, the closing level of 21 Mar. A stop-loss can now be placed below MYR2,095.

Towards the downside, the immediate support is still expected at MYR2,038, the low of 15 Mar. Breaking this may see the market move towards MYR1,940, the low of 27 Nov 2018. On the other hand, the immediate resistance is set at MYR2,217, the high of 4 Feb. This is followed by MYR2,278, or 25 Feb’s high.

Source: RHB Securities Research - 4 Apr 2019