Maintain long positions as the bulls remain in control. The FCPO failed to maintain its intraday positive tone, easing MYR13 to close at MYR3,116 last week. The session’s high was at MYR3,149. Despite the failure to hold on to its intraday gains on the back of the still-overbought RSI reading, the latest performance did not flash out a price exhaustion signal. As such, we still believe the commodity’s multi-month uptrend is still firmly in place – and the risk of a correction remains contained. For now, this bias would stay – provided the immediate support of MYR3,011 is not breached. We maintain our positive trading bias.

In the absence of a price exhaustion signal, 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 expected at MYR3,011, the latest session’s low. This is followed by MYR2,806, the low of 18 Dec. Meanwhile, the immediate resistance level is set at MYR3,202, the high of 19 Dec 2016. This is followed by the psychological level of MYR3,300.

Source: RHB Securities Research - 6 Jan 2020