No sign for a deeper correction phase developing; maintain long positions. The FCPO traded in a relatively narrow range of MYR3,024-3,059, before closing slightly lower by MYR1 at MYR3,041. The soft commodity has been showing signs of developing a minor correction phase over the recent sessions, after its multi-month uptrend reached an overbought RSI reading recently. The risk of a deeper correction phase developing may only materialise if the immediate support of MYR3,011 is breached towards the downside. For now, we keep to our positive trading bias. On the observation that the bulls still have firm control over the price trend, traders are recommended to stay in long positions. These were initiated at MYR2,175, the close 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. Conversely, 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 - 9 Jan 2020