Triggers stop-loss; reverse to long positions. The FCPO saw a reversal play on Friday, rebounded from the low of MYR3,200 and settled at MYR3,338. The commodity started the Friday session with a bang, gapping MYR73 higher to start at MYR3,300. However, the bulls were not ready during the morning session, seeing the commodity sold down to the day low of MYR3,200 just before lunch break. Once the afternoon session started, the sentiment changed, seeing the bulls charge to the high of MYR3,340. Throughout the session, the commodity saw a day range of MYR140, a difference between the day low and day high. The huge day range signifies a great change of sentiment on top of the commodity breaching the MYR3,332 resistance level. As positive momentum emerged, switch to a positive trading bias.

Our previous short positions – initiated at MYR3,227, or the closing level of 26 Nov – were closed out at MYR3,332 after triggering the stop-loss. Concurrently, we initiate long positions. To manage risks, a stop-loss can be set below the MYR3,217 mark.

The immediate support is set at the round figure of MYR3,250, followed by the recent low of MYR3,200. Towards the upside, the immediate resistance is marked at the high of 18 Nov, ie MYR3,370, followed by the highest high of Nov, ie MYR3,420.

Source: RHB Securities Research - 7 Dec 2020