Maintain long positions. The FCPO saw some profit-taking activities during Friday’s session, closing lower at MYR3,181. The commodity had a strong start during this session, opening with a MYR27.00 gap up at MYR3,235. It saw strong buying interest during the morning session, rising higher to the MYR3,262 high. During the afternoon session, risk-off sentiment kicked in, with the FCPO retracing MYR87.00 from a day high towards a day low of MYR3,175 and settling at MYR3,181. Combining both Thursday and Friday’s price actions, we saw a bearish reversal candle known as a “dark cloud cover” forming. Selling pressure will increase or a reversal formation will be confirmed if the commodity trades below the support level. If it does move into a correction phase, we think buying interest will emerge somewhere near the support level. As long as this mark is not breached, we retain our positive trading bias.

We recommend traders stay in long positions. We initiated these at MYR3,208, or the closing level of 5 Nov. To limit downside risks, a stop-loss level can be placed below the MYR3,115 mark.

The immediate support is set at MYR3,115 and followed by MYR3,059. On the upside, the immediate resistance is sighted at MYR3,250 and followed by the MYR3,300 round figure.

Source: RHB Securities Research - 16 Nov 2020