No sign for a deeper correction developing; maintain long positions. The FCPO staged an intraday positive price reversal to close MYR39 stronger at MYR2,554. This came after it reached a low and high of MYR2,503 and MYR2,564. The positive session means there was no follow-up from the prior session’s negative performance, indicating that there is no confirmation for a correction phase to develop yet. This is despite the RSI still showing an overbought condition. Until there are further negative price actions to mark an interim top for the commodity’s upward move, we are keeping our positive trading bias.

As the bulls are still showing control over the multi-month upward move, traders are advised to remain in long positions. These were initiated at MYR2,175, the closing level of 9 Sep. To manage risks, a stop-loss can now be placed below MYR2,445.

Towards the downside, the immediate support is set at MYR2,445, the low of 30 Oct, followed by MYR2,400. On the other hand, the immediate resistance is pegged at MYR2,568, the high of 1 Mar 2018, followed by MYR2,600

Source: RHB Securities Research - 7 Nov 2019