Maintain long positions. The FCPO shed MYR40 to close at MYR2,167 last Friday. At one point it came close to testing the MYR2,140 support level. Consequently, a “Bearish Harami” formation appeared. The negative session came after the commodity reached the 50-day SMA line in the prior session. However, the weak session did not produce sufficient evidence to indicate a price rejection occurred from the said SMA line. As such, we still consider the rebound that started from the low of MYR1,939 on 6 May as still firmly in place. Hence, we are maintaining our positive trading bias.

Pending confirmation of the “Bearish Harami” formation, 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 now be placed below MYR2,140.

The immediate support remains at MYR2,165, the price point of 21 May. This is followed by MYR2,140, the low of 20 May. Conversely, the immediate resistance is set at MYR2,220, followed by MYR2,273 – the high of 20 Apr.

Source: RHB Securities Research - 1 Jun 2020