Maintain long positions as bulls are pushing ahead. The FCPO formed an “Upside Gap” to settle MYR114.00 stronger at MYR2,281 yesterday, after crossing above the previous resistance points of MYR2,220 and MYR2,273. The positive session also invalidated the prior session’s “Bearish Harami” formation and placed the commodity above the 50-day SMA line. This is a positive price signal, as the rebound that started from the low of MYR1,939 on 6 May is still firmly in place. For now, this positive bias will likely prevail, if the MYR2,200 support mark is not breached southwards.

As the bulls have strong control over the rebound, we advise traders to stay in long positions. We initiated these at MYR2,032, the closing level of 13 May. To manage risks, a stop-loss can now be placed below MYR2,200.

The immediate support is revised to MYR2,240 – the price point of the latest session, followed by MYR2,200. In the meantime, the immediate resistance is set at MYR2,350, followed by MYR2,409 – the high of 9 Apr’s “Bearish Engulfing” formation.

Source: RHB Securities Research - 1 Jun 2020