Maintain long positions as the commodity’s price is above the 200-day SMA. Despite not being able to hold on to most of its intraday gains, the FCPO’s price performance yesterday pointed to a positive follow-up from the prior session’s recapturing of the 200-day SMA line. After hitting a high of MYR2,586, the commodity settled at MYR2,524, indicating a gain of MYR29. The relatively lower closing price vs-a-vis the session’s high merely implies profit-taking after the latest two sessions’ sharp upward move – and should not be regarded as a possible price exhaustion signal. We maintain our positive trading bias.

With price holding well above the said SMA line, traders are recommended to keep long positions. We initiated these at MYR2,495, the closing level of 4 Mar. To manage risks, a stop-loss can be placed below MYR2,400.

The immediate support is pegged at MYR2,450, followed by MYR2,400 – both are price points from 4 Mar’s candle. Meanwhile, immediate resistance is still expected at MYR2,533 – the high of 25 Feb. This followed by MYR2,600.

Source: RHB Securities Research - 6 Mar 2020