Maintain long positions as the rebound is gathering pace. The FCPO closed on a firm footing yesterday, adding MYR51.00 to close at MYR2,142 – which broke the previous resistance points of MYR2,095 and MYR2,125. The positive session further reinforces our bias that the commodity is staging a rebound. This rebound set in after the previous multi-week retracement occurred, when the commodity’s price fell to a low of MYR1,939 on 6 May. Towards the upside, there is a high possibility that the rebound to reach the 50-day SMA line. As such, we maintain our positive trading bias.

With the bulls showing firm control over the rebound, we advise traders to stay in long positions. We initiated these positions at MYR2,032, the closing level of 13 May. To manage risks, a stop-loss can be placed at the breakeven mark.

We revised the immediate support to MYR2,080 – the price point of 15 May. This is followed by MYR2,050 – near the low of 15 May. Moving up, the immediate resistance is at MYR2,186 – the high of 21 Apr. This is followed by MYR2,220 – near the 50-day SMA line.

Source: RHB Securities Research - 19 May 2020