Maintain long positions. The FCPO repeated the same trending pattern, forming three consecutive white candles. During the morning session, the commodity had a weak opening, falling MYR16 to open at MYR3,330. However, it manage to recoup its losses and stay in positive territory until the morning session ended. Moving into the afternoon session, the commodity saw selling pressure within the first 30 minutes and declined to the day’s low of MYR3,321. Similar to the previous two trading days, the bulls seized the opportunity and caused a V-shape rebound, which pushed the commodity towards the day’s high of MYR3,397, before settling at MYR3,391. MYR3,397 was the resistance level we had projected on the previous day. We view the average trading range of MYR51 as still valid and applicable. Hence, if the commodity surpasses the immediate resistance, we are looking at the next hurdle of MYR3,442, with the downside at MYR3,340. As the commodity is moving into a multi-year high, we keep to 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 profits, we raise our trailing stop to MYR3,340.

The immediate support is moved higher to MYR3,340, followed by MYR3,281. On the upside, the immediate resistance is pegged at the recent high of MYR3,397, followed by MYR3,442.

Source: RHB Securities Research - 18 Nov 2020