Maintain long positions as the commodity is still holding up. The FCPO shed MYR8 to close at MYR2,192 last Friday, after oscillating between a low and high of MYR2,184 and MYR2,226. Overall, the uptrend that started from the low of MYR1,916 on 10 Jul is still staying strong. Price actions over the latest three sessions suggest the commodity is merely developing a minor pause below the immediate resistance of MYR2,235, ie no sign of a price rejection. For now, provided the MYR2,173 mark (the stop-loss for the ongoing long positions) is not breached at the closing, the risk of the FCPO developing a deeper price correction would still be low. We maintain our positive trading bias.

As the bulls are still exerting control over the price trend, traders should remain in long positions. These were initiated at MYR2,029, the closing level of 24 Jul. For risk management purposes, a trailing-stop can be placed at below the MYR2,173 level.

The immediate support is at MYR2,100, near the 200-day SMA line. This is followed by MYR2,049, the low of 31 Jul. Moving up, the immediate resistance is expected at MYR2,235, the high of 5 Apr. This is followed by MYR2,344, the high of 7 Feb.

Source: RHB Securities Research - 19 Aug 2019