Maintain long positions as the commodity swings back above MYR2,300. The FCPO’s latest performance was a reverse of the prior session. After testing the immediate support of MYR2,279 earlier in the session with a low of MYR2,270, the commodity rebounded and then closed MYR56.00 higher at MYR2,341 – above the previous immediate resistance of MYR2,300. The positive performance meant there was no follow-up from the prior session’s negative price action – suggesting the risk of a correction is contained, for now. We maintain that as long as the support is not breached, the ongoing 3-week rebound will remain in place. We make no change to our positive trading bias.

With the bulls having invalidated the prior session’s negative price signal, 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 be placed below MYR2,279.

We revise the immediate support to MYR2,300, followed by MYR2,279 – the low of 1 Jun. Towards the upside, the immediate resistance is revised to MYR2,350, followed by MYR2,409 – the high of 9 Apr’s “Bearish Engulfing”.

Source: RHB Securities Research - 3 Jun 2020