Rebound from the 200-day SMA line still extending; maintain long positions. The FCPO closed marginally higher by MYR5 at MYR2,201 yesterday. This was after it registered a low and high of MYR2,190 and MYR2,216. The positive session is a follow-up from the prior session’s “Upside Gap”. This also can be seen as an extension of the commodity’s upward move, which resumed after it tested the 200-day SMA line on 30 Sep. The marginal breach of the RSI resistance line (as drawn on the chart) also suggests that the momentum is picking up. As such, we maintain our positive trading bias.

As the bulls still control the price trend, we continue to recommend that traders stay in long positions, initiated at MYR2,175, the closing level of 9 Sep. To manage risks, a stop-loss can be placed below MYR2,100.

We are keeping the immediate support at MYR2,177, the high of 8. This is followed by MYR2,100, near the 200-day SMA line. On the other hand, the immediate resistance is set at MYR2,250. Breaking this may see market test MYR2,312, the high of 26 Aug

Source: RHB Securities Research - 11 Oct 2019