Initiate long positions to tag the rebound phase. The FCPO ended the latest session strong, adding MYR86 to settle at MYR2,973. Trading ranged between MYR2,853 and MYR2,975. The strong closing pushed the commodity above the previous immediate resistance of MYR2,907. This implies the commodity’s recent correction phase, which started from the high of MYR3,150, has reached an interim low at MYR2,816 on 17 Jan. The said low is also located near the 50-day SMA line. Hence, we switch our trading bias to positive.

Our previous short positions initiated at MYR3,005, the closing level of 14 Jan, were closed out at MYR2,907 in the latest session. As we believe the commodity has found an interim low, we initiate long positions at the latest closing. To manage risks, a stop-loss can be placed below MYR2,816.

The immediate support is now eyed at MYR2,907, the high of 20 Jan, followed by MYR2,816, the low of 17 Jan. Meanwhile, the immediate resistance is now pegged at MYR3,000, a psychological level, followed by MYR3,038, the high of 15 Jan.

Source: RHB Securities Research - 23 Jan 2020