Maintain long positions. The FCPO ended the latest session on a negative note – it weakened MYR30 to close at MYR2,239. Trading range was between MYR2,227 and MYR2,258. The weak session can be seen as a follow-up from the prior session’s failed attempt to cross above the MYR2,300 round figure, which coincided with the overbought RSI reading. However, we see the price actions of the recent two sessions as a mere minor consolidation. Towards the downside, risk for a deeper retracement may develop should the immediate support of MRY2,150 give way. Maintain our positive trading bias for now.

As the risk for the commodity to develop a deeper retracement is still contained, traders are advised to remain in long positions. We initiated these at MYR2,256, the closing level of 22 Aug. For risk management purposes, a stop-loss can be placed below the MYR2,150 level.

The immediate support is expected at MYR2,150, the low of 20 Aug. This is followed by MYR2,100, near the 200-day SMA line. On the other hand, the immediate resistance is set at MYR2,344, the high of 7 Feb. This is followed by MYR2,400, the next round figure.

Source: RHB Securities Research - 28 Aug 2019