Maintain long positions. The FCPO closed MYR9.00 higher yesterday at MYR3,003, as it managed to reverse the movement from the weak earlier session, where prices dropped to a low of MYR2,960. Despite the positive close, the intraday price movement supports our expectation for the commodity to stage a minor consolidation following its past one week’s sharp gains. We expect this minor consolidation to extend into the next 2-3 sessions. However, as the consolidation is still narrow in nature, based on the daily chart, we are maintaining a positive trading bias until signs of a deeper correction emerge.

We recommend that traders stick to long positions. We initiated these at MYR2,818, the closing level of 6 Oct. To manage risks, a stop-loss can be placed below MYR2,900.

The immediate support is revised to MYR2,960, followed by MYR2,900. On the other hand, the immediate resistance stayed at MYR3,050, followed by MYR3,104 – the high of 21 Sep.

Source: RHB Securities Research - 14 Oct 2020