Maintain long positions as the 200-day SMA line is still holding up. The FCPO experienced a negative session. It closed MYR29 weaker to settle at MYR2,156. Trading ranged between MYR2,145 and MYR2,172. The negative session also breached the previous immediate support of MYR2,177 and filled the 9 Oct’s “Upside Gap”. With the filling of the said “Upside Gap” price actions in the coming sessions would be critical; further negative price movements and a downside breach of the 200-day SMA line could invalidate our positive bias. Recall, our current positive stance is anchored on the bias that the commodity has completed its multi-week correction between end-August and endSeptember, with the retesting on the 200-day SMA line. Maintain our positive bias for now.

As we still see the possibility is good for the commodity to extend its upward move, 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.

Towards the downside, the immediate support is revised to MYR2,100, near the 200-day SMA line, followed by MYR2,000, a psychological level. Moving up, the immediate resistance is set at MYR2,250, followed by MYR2,312, the high of 26 Aug.

Source: RHB Securities Research - 15 Oct 2019