Maintain long positions to tag the uptrend extension. The FCPO reversed its earlier weak opening to hand in a gain of MYR55 to close at MYR2,943. We believe the commodity has completed its 1-week correction phase in the form of a sharp retracement on 20 Oct, and chances are high that it is in the process of extending its multi-month uptrend, which stretched from the low in May. Towards the upside, we are expecting the commodity to, at the minimum, retest 21 Sep’s “Bearish Engulfing” formation high of MYR3,104. Maintain our positive trading bias.

As the bulls are signalling good control over the price trend, we recommend traders stay in long positions. We initiated these at MYR2,888, the closing level of 21 Oct. To manage risks, a stop-loss can be placed below MYR2,820.

We revise the support level to the round figure of MYR2,900, followed by MYR2,850. On the upside, the immediate resistance is revised to MYR2,970, followed by the round figure of MYR3,000.

Source: RHB Securities Research - 23 Oct 2020