Initiate long positions as the bulls regain control. Last Friday, the FCPO formed an “Upside Gap” to hand in a gain of MYR56.00, closing at MYR2,738. The positive closing placed the commodity above the MYR2,700 level, signalling that the bulls have regained control over the price direction. Looking at price actions over recent weeks, the commodity is showing signs of developing a sideways trading range of between MYR2,600 and MYR2,800. With the indication that the commodity is again challenging the upper-threshold of the said range, we switch our trading bias from negative to positive.

Our previous short positions initiated at MYR2,615, or the closing level of 25 Aug, were closed out in the latest session as the commodity crossed above the MYR2,700 mark. Concurrently, we initiate long positions at the latest closing level. To manage risks, a stop-loss can be placed below MYR2,650.

The immediate support is revised to MYR2,700, followed by MYR2,650. Towards the upside, the immediate resistance is now eyed at MYR2,800, followed by MYR2,850.

Source: RHB Securities Research - 1 Sept 2020