Maintain long positions. The FCPO saw another bullish session as it jumped MYR90 higher to settled at MYR3,346. This level is significant as we last saw this in May 2012. The commodity started the session opening at MYR3,305 and moved sideways during the morning session. Intraday, it sold down within 30 minutes to low of MYR3,281. In a similar fashion to the previous session, buying interest emerged when there was a correction during the afternoon session. The bulls fully absorbed all selling pressure as the index rebounded and closed near the high of MYR3,349. The reversal pattern of the Dark Cloud Cover on 6 Nov was negated by the bullish momentum. Based on observation, the average trading range for the commodity for the past 20 sessions, has been c.MYR51. Hence, in a best case scenario, the next resistance will likely be MYR51 from the closing price – MYR3,397. With the commodity still demonstrating a pattern of stronger highs and lows, we maintain our positive trading bias.

We recommend traders to stay in long positions. We initiated these at MYR3,208, the closing level of 5 Nov. To limit downside risks and protection on profit, we set a trailing stop at MYR3,281.

The immediate support level rises to MYR3,281, followed by MYR3,193. On the upside, the immediate resistance is revised to MYR3,375, followed by MYR3,397.

Source: RHB Securities Research - 17 Nov 2020