Bulls are back in control; initiate long positions. The FCPO formed an “Upside Gap”, which at the closing, breached the 200-day SMA line at MYR2,475 – indicating a gain of MYR105. With the recapturing of the said SMA line, this implies the upward move that started from the low of 6 May is extending. This is after experiencing a relatively narrow correction phase in recent sessions – our previous negative trading bias was based on the expectation that a deeper correction was likely to develop. Switch our trading bias to positive.
Our previous short positions, initiated at MYR2,329 ie the closing level of 15 Jun, were closed out at the latest session. On the observation that the bulls have regained control over the price trend, we initiate long positions at the latest closing. To manage risks, a stop-loss can be placed below MYR2,400.
We revised the immediate support to MYR2,435 – price point of the latest session. This is followed by MYR2,400. Moving up, the immediate resistance is now pegged at MYR2,500 round figure, followed by MYR2,550.
Source: RHB Securities Research - 22 Jun 2020