Maintain long positions. The FCPO took a breather yesterday, declining MYR27.00 to settle at MYR3,542. On the first trading day of the week, the commodity had a positive opening, gapping up MYR6.00 to open at MYR3,575 and travelled to the day high at MYR3,589. Despite the positive start, the momentum faltered and pulled back to the day low at MYR3,516 before closing at MYR3,542. Although the commodity broke out from the previous resistance, the bulls seized the opportunity to profit-take near the MYR3,589 level. However, the selling pressure has not flashed any negative reversal patterns yet. We will see the recent profit-taking as a sign of a mild correction. Meanwhile, we do expect further profit-taking to drag the FCPO, causing it to trade lower in the coming sessions. Nonetheless, the rising RSI indicator suggests the immediate term sentiment trending towards bullish. Hence, unless the downside stop-loss level is triggered, we maintain our positive trading bias.

We recommend traders maintain long positions. Our long positions were initiated at MYR3,535, or the closing level of 23 Dec. To manage risks, a stop-loss can be placed below the MYR3,450 threshold.

The immediate support level is marked at MYR3,470 and followed by MYR3,450. Meanwhile, the immediate resistance is now pegged at the MYR3,600 round figure and followed by MYR3,650.

Source: RHB Securities Research - 4 Jan 2021