Maintain long positions as the commodity is testing the 200-day SMA line. The FCPO ended the latest session positively – at one point, it even tested the 200-day SMA line. The session’s low and high were recorded at MYR2,081 and MYR2,108, before settling MYR9 higher at MYR2,102. The positive session suggests the counter-trend that started from the low of MYR1,916 on 10 Jul is still firmly in place. Price actions around the said SMA line in the coming seasons are important – a strong price rejection from this SMA line could mark the end of the commodity’s counterrebound phase. For now, we are keeping our positive trading bias.

In the absence of price rejection signals from the said SMA, traders are advised to remain in long positions. We initiated these at MYR2,029, the closing level of 24 Jul. For risk management purposes, a stop-loss can now be placed at the breakeven level.

We are keeping the immediate support target at MYR2,008, 23 Jul’s high. This is followed by MYR1,916, the low of 10 Jul. Moving up, the immediate resistance is set at MYR2,115, the high of 29 May. This is followed by MYR2,156, the low of 26 Apr.

Source: RHB Securities Research - 7 Aug 2019