Bulls surged past toughest resistance; initiate long positions. The FCPO broke past the resistance level, reaching MYR3,208, a level last seen in 19 Dec 2016. Riding on the strong momentum, the commodity started the session with MYR38 gapped up, opening at MYR3,135. It went to the low of MYR3,106 before it pumped higher to a session high of MYR3,211. The commodity retraced MYR3 from the high to settle at MYR3,208. Since the commodity had moved higher during the last three trading sessions, we do expect some minor pull-back or profit-taking activities in the near term. With the RSI indicator moving above the 50% threshold, coupled with the 50-day SMA line trending higher, we think the bullish momentum will stay intact – any minor correction will provide an opportunity to ride the bull trend. Underpinning a breakout of resistance or higher high pattern formed, we switch our negative trading bias towards positive.

Our previous short positions, initiated at MYR3,011 – the closing level of 30 Oct – were closed out at the latest session at MYR3,123. Concurrently, we initiate long positions. To manage risks, a stop-loss can be placed below MYR3,059.

The immediate support is revised to MYR3,115, followed by MYR3,059. Moving up, the immediate resistance is expected at MYR3,250, followed by the MYR3,300 round figure

Source: RHB Securities Research - 11 Nov 2020