Maintain long positions while setting a trailing-stop below the MYR2,008 support. The FCPO ended higher to form a white candle yesterday. It gained MYR7 to close at MYR2,068, after oscillating between a high of MYR2,075 and low of MYR2,056. Based on the current technical landscape, we think the buyers may have retained control of the market. This was as yesterday’s white candle has recouped most of the previous session’s losses. In addition, as the 14-day RSI indicator is now rising higher without being overbought, the bullish sentiment has improved. Overall, we remain upbeat in our outlook on the FCPO.

Based on the daily chart, the immediate support is seen at MYR2,008, ie set near 24 Jul’s upside gap support. The next support is maintained at MYR1,916, obtained from the previous low of 10 Jul. To the upside, we anticipate the immediate resistance level at MYR2,115, situated at the high of 29 May. If this level is taken out, look to MYR2,156 – ie the downside gap resistance of 26 Apr – as the next resistance.

Therefore, we advise traders to maintain long positions, in line with our initial recommendation to have long positions above the MYR2,029 level on 25 Jul. A trailing-stop can be set below the MYR2,008 mark in order to minimise the downside risk.

Source: RHB Securities Research - 1 Aug 2019