Maintain long positions while keeping the trailing-stop tight. The FCPO formed a black candle in the latest session, which erased the gains of the two previous sessions. The intraday tone was negative as the commodity generally trended lower, particularly in the second half of the session. The high and low were recorded at MYR2,220 and MYR2,173, before closing at MYR2,174, implying a decline of MYR45. The weak session was significant as it took place near the immediate resistance of MYR2,235 on the back of an overbought RSI reading. This suggests the possibility of a price rejection which could mark, at the minimum, an interim top for the commodity’s upward move that started from the low of MYR1,916 on 10 Jul. For now, until the latest intraday low is not breached, we keep to our positive trading bias.

For now, we maintain our recommendation for traders to remain in long positions. We initiated these at MYR2,029, the closing level of 24 Jul. To manage risks, a stop-loss can now be placed below the MYR2,173 level.

The immediate support is still pegged at MYR2,100, which is near the 200-day SMA line. This is followed by MYR2,049, the low of 31 Jul. Meanwhile, the immediate resistance is set to emerge at MYR2,235, the high of 5 Apr. This is followed by MYR2,344, the high of 7 Feb.

Source: RHB Securities Research - 16 Aug 2019