Maintain long positions on positive follow through. The FCPO extended its upward move following its prior session’s upside breach of the 200-day SMA line. The soft commodity traded in the range of MYR2,515 and MYR2,567, before closing MYR62 higher at MYR2,564. The positive follow-though is indicating that the bulls are firmly in control over the commodity’s price trend. The RSI has crossed above the resistance line (as drawn in the chart) and is slightly overbought. However, in the absence of a price exhaustion signal, we are keeping our positive trading bias.

With the positive trend continuing to develop, we advise traders to stay in long position. We initiated these at MYR2,500 – the closing level of 14 Jul. To manage risks, a stop-loss can be placed at the breakeven mark.

We revise the immediate support to MYR2,540 followed by MYR2,525 – both are derived from the latest candle. Conversely, the immediate resistance is revised to MYR2,586 – the high of 5 Mar, followed by the MYR2,600 round figure.

Source: RHB Securities Research - 21 Jul 2020