The bulls are taking a pause, maintain long positions. The FCPO managed to stage an intraday rebound in the latest session to settle MYR13 higher at MYR2,234. The trading range was between MYR2,201 and MYR2,246. Overall, we still believe the commodity’s recent price actions are indicating that a consolidation phase is taking place to correct its previous upward move, which reached a stretched RSI reading. For now, as long as the immediate support of MYR2,150 is not breached to the downside, the risk for the soft commodity experiencing a deep retracement should still be low. We maintain our positive trading bias.

As the FCPO’s upward move is still firmly in place, traders are advised to remain in long positions. We initiated these at MYR2,256, or 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 set at MYR2,150, ie the low of 20 Aug. This is followed by MYR2,100, which is near the 200- day SMA line. On the other hand, the immediate resistance is set at MYR2,344, or the high of 7 Feb. This is followed by MYR2,400 – the next round figure.

Source: RHB Securities Research - 3 Sept 2019