Maintain long positions. The FCPO formed a black candle to settle the latest session MYR53 weaker at MYR2,181. The soft commodity generally moved lower for the entire session – the high and low were posted at MYR2,254 and MYR2,179. It has been in a consolidation phase over the past one week or so after testing the MYR2,300 round figure recently on an overbought RSI reading. Provided the MYR2,150 immediate support is not breached, the risk of a deep retracement developing should still be contained. We maintain our positive trading bias.

As the said consolidation is still relatively narrow in nature, 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.

Towards the downside, 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. Moving up, 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 - 4 Sept 2019