Maintain long positions until the price correction phase is confirmed. The FCPO gave up most of its intraday gains to cease MYR3 higher at MYR2,878. The high was posted at MYR2,920. The inability to hold on to most of its intraday gains suggests the possibility is now higher for the commodity to experience a pause after its recent weeks’ upward move reached the overbought level. We are of the view the risk for a deeper correction to develop is still contained, provided the MYR2,850 support level is not breached towards the downside. Premised on this, we keep to our positive trading bias.

As the recent sessions’ price actions are still showing a relatively narrow pause by the bulls, traders are advised to remain in long positions. These were initiated at MYR2,175, the closing level of 9 Oct. To manage risks, a stop-loss can now be placed below MYR2,850.

The immediate support is eyed at MYR2,850, the low of 13 Dec. This is followed by MYR2,685, the low of 2 Dec. Meanwhile, the immediate resistance is pegged at MYR2,986, the high of 16 February 2017. This is followed by MYR3,075, the high of 15 February 2017.

Source: RHB Securities Research - 18 Dec 2019