Maintain long positions on the expectation of a rebound. The FCPO settled MYR48 weaker to close at MYR2,925, after hitting a low and high of MYR2,912 and MYR2,966. Despite the weak session, we still believe the soft commodity is still staging a rebound – after it recently tested the MYR2,816 support level near the 50-day SMA. Provided this support holds up, we will maintain our positive trading bias.

As rebound still has potential to scale higher, traders should remain in long positions. We initiated these at MYR2,973, the closing level of 22 Jan. To manage risks, a stop-loss can be placed below MYR2,816.

We maintain the immediate support at MYR2,907, the high of 20 Jan, followed by MYR2,816, the low of 17 Jan. Towards the upside, the immediate resistance is at MYR3,000, a psychological level, followed by MYR3,038, the high of 15 Jan.

Source: RHB Securities Research - 24 Jan 2020