Maintain long positions as there is no sign that a deeper correction is developing. The FCPO closed MYR74 weaker yesterday, at MYR3,042, after recording a low and high of MYR3,040 and MYR3,136. The daily chart indicates that the second consecutive weak daily performance has yet to produce a negative price signal that could point to a deeper correction. The risk of this correction could materialise if the immediate support of MYR3,011 is breached towards the downside. For now, we regard the weak sessions as just a minor pause, after the commodity’s RSI reading reached an overbought reading recently. We maintain our positive trading bias.

Premised on this, 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 set at MYR3,011, the latest session’s low. This is followed by MYR2,806, the low of 18 Dec. Towards the upside, 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 - 7 Jan 2020