Maintain long positions as the consolidation phase is developing. The FCPO gave back most of its intraday gains to settle MYR6 higher at MYR2,187. The high and low were registered at MYR2,217 and MYR2,181. The commodity’s recent price actions continued to indicate that a relatively narrow consolidation phase is developing. This is to correct its previous strong upward move, which has reached an overbought RSI reading. For now, the risk for a deeper retracement to develop may only happen should the immediate support of MYR2,150 be breached towards the downside. Hence, we keep to our positive trading bias.

On the observation that the bulls are still having control over the price trend, 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 expected at MYR2,150, ie the low of 20 Aug. This is followed by MYR2,100, which is near the 200-day SMA line. Meanwhile, 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 - 5 Sept 2019