Despite stop-loss triggered, maintain long positions. The FCPO rebounded from the support level with a long lower shadow, rising MYR38 to settle at MYR3,326. The commodity had a shaky start during the morning session, opening MYR28 lower at MYR3,260. The commodity failed to find its footing and fell to the day’s low of MYR3,182. The bulls emerged shortly after the afternoon session started, pushing the commodity towards the day’s high of MYR3,332, recouping the losses incurred previously. From the latest price action, this reaffirms our view that MYR3,276 will be a strong support level. However, the commodity has overshot our expectations and the stop-loss was triggered. We think that the overall trend still remains bullish, underpined by the uptrending of the 20-day SMA line, with the bulls not giving up yet. With the support level tested and remaining intact, we maintain a positive trading bias.

We recommend traders stick to long positions. Our previous positions, which initiated at MYR3,364, or the closing level of 18 Nov, were closed out on Monday at MYR3,276 with the stop-loss triggered. Concurrently, we re-initiate long positions on Monday’s closing level.To manage risks, a stop-loss can be placed below the MYR3,234 mark.

The immediate support is marked at the low of 17 Nov, ie MYR3,276, and followed by MYR3,234. Towards the upside, the immediate resistance is pegged at MYR3,350 and followed by the recent high of MYR3,420.

Source: RHB Securities Research - 30 Nov 2020