Maintain long positions. The FCPO rallied higher on the first trading day of 2021, adding MYR124.00 to settle at MYR3,724. The commodity saw a positive opening, gapping upwards by MYR61.00 to open at MYR3,661. The bulls took profit early in the session, while sellers tried to drag the commodity to the day’s low of MYR3,657. However, strong buying interest emerged in the afternoon, pushing the commodity towards the day’s high of MYR3,732 and closed at MYR3,724. We reiterate that we believe the rally is underpinned by strong buying interest. Investor sentiment for the immediate term should remain bullish, as RSI is moving higher into an overbought level. With the 50 and 200-day SMA lines pointing north, the rally should continue until we see a negative signal or bearish reversal candle. Until that happens, we maintain a positive trading bias.

We recommend that traders maintain long positions. Our long positions were initiated at MYR3,535, or the closing level of 23 Dec. To manage risks, a trailing-stop can be set below the MYR3,580 mark.

The immediate support level is marked at the recent low of MYR3,657, followed by MYR3,573. Meanwhile, the immediate resistance is now pegged at MYR3,750, followed by MYR3,800.

Source: RHB Securities Research - 5 Jan 2021