Maintain long positions while moving up the trailing-stop. The FCPO failed to sustain the breakout from its recent sessions’ minor consolidation yesterday. It declined, then closed at MYR2,388 after reaching a high of MYR2,422, after briefly testing the immediate resistance of MYR2,409. Looking at the commodity’s price actions over the past week or so, the momentum of its rebound that started in early May is fading. Coupled with the latest failed breakout – which also took place not too far from the 200-day SMA line – further negative price actions in the coming sessions could mark an interim top for this rebound. For now, however, we make no change to our positive trading bias.

Until there are further negative price actions, 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 MYR2,330.

We revised the immediate support to MYR2,330 – near the latest low. This is followed by MYR2,300. Conversely, the immediate resistance is now set at MYR2,409 – the high of 9 Apr’s “Bearish Engulfing” pattern. This is followed by MYR2,460, which is near the 200-day SMA line.

Source: RHB Securities Research - 10 Jun 2020