Maintain long positions, pending confirmation of the price exhaustion. The FCPO underwent a sharp negative intraday price reversal yesterday. At one point, it came close to testing the MYR2,586 resistance with a high of MYR2,584, before sliding down to close MYR2,520. The adverse price reaction from the resistance may point to a possible price rejection. Should the MYR2,500 support mark be breached, this would open the door for further weakness in price. Until this happens, we make no change to our positive trading bias.

We advise traders to stay in long positions. We initiated these at MYR2,502 – 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 MYR2,500 followed by MYR2,465 – both are slightly above and below the 200-day SMA line respectively. Conversely, the immediate resistance is revised to MYR2,545, followed by MYR2,586 – derived from the high of 5 Mar.

Source: RHB Securities Research - 17 Jul 2020