Initiate long positions to tag the rebound play. The FCPO formed an “Upside Gap” in the latest session to settle MYR97 stronger at MYR2,818, slightly below the intraday high of MYR2,820. The closing level places the commodity back above the 50-day SMA line. This confirms our view for the commodity to stage a positive price reversal, after its recent sessions’ retracement flashed out signs of losing momentum, as well as its inability to decisively breach the MYR2,700 support mark – despite multiple attempts. Premised on this, we switch our trading bias from negative to positive.

Our previous short positions initiated at MYR3,007, the closing level of 21 Sep, were closed out at the latest session. Concurrently, we initiate long positions. To manage risk a stop-loss can be set below MYR2,700.

The immediate support is revised to MYR2,770, followed by MYR2,700 round figure. On the upside, immediate resistance is eyed at MYR2,825, followed by MYR2,870.

Source: RHB Securities Research - 7 Oct 2020