Maintain long positions while moving up the trailing-stop. The FCPO ended its four sessions’ upward move, as it charted a black candle to close MYR76 lower at MYR3,052. Trading ranged between MYR3,011 and MYR3,130. For now, the negative session can be seen as just a pause – after the recent price run-up saw the RSI reach an overbought reading. However, should there be a negative price follow-up in the coming sessions, it could possibly mean the soft commodity’s multi-month upward move has reached an interim top and is at the risk of entering a correction phase. Until we see signs of this taking place, we are keeping our positive trading bias. As the upward move is still considered as intact, 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 MYR3,011. The immediate support is revised to MYR3,011, the latest sessions’ low. This is followed by MYR2,806, the low of 18 Dec. Meanwhile, the immediate resistance level is pegged at MYR3,202, the high of 19 Dec 2016. This is followed by the psychological level of MYR3,300.

Source: RHB Securities Research - 2 Jan 2020