Risk of a deeper correction still contained; maintain long positions. The FCPO formed a white candle to close MYR25 stronger at MYR2,622. Trading ranged between MYR2,603 and MYR2,635. We regard this as the commodity still trading in a healthy minor consolidation phase over the past week. This was after it reached a high of MYR2,657 on 11 Nov, on the back of an overbought RSI reading. Once this minor consolidation phase is completed, the multi-week upward move is likely to be extended. In the absence of adverse price signals that would point to a deeper correction, we keep to our positive trading bias.

Since the correction phase is still narrow in nature, 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 MYR2,558.

Towards the downside, the immediate support is pegged at MYR2,503, the low of 6 Nov. This is followed by MYR2,445, the low of 30 Oct. Moving up, the immediate resistance is set at MYR2,683, the high of 20 Nov 2017, followed by MYR2,758, the high of 16 Nov 2017.

Source: RHB Securities Research - 20 Nov 2019