Trailing stop triggered; Initiate long positions. The FCPO broke out from the interim consolidation zone, jumping MYR122.00 to settle at MYR3,388. On Wednesday, the commodity gapped up MYR44.00 to open at MYR3,310. After briefly trading at the day’s low of MYR3,282, strong demand lifted prices towards the day’s high of MYR3,392, and the session ended at MYR3,388. The commodity managed to close above the MYR3,335 resistance level, indicating that a counter trend rebound has started. With the positive setup, the bulls are staring at the resistance level near the 50-day SMA line. Meanwhile, for coming sessions, the commodity needs to stay above the support level of MYR3,244 to sustain the counter-trend movement. As the commodity broke out of the sideways zone, and recorded a higher high pattern, we shift over to a positive trading bias.

Our short positions, initiated at MYR3,695 or the closing level of 12 Jan, were closed out during Wednesday’s session. We initiated long positions at the closing level of 27 Jan. To manage risks, a stop-loss is placed at the MYR3,244 mark.

The immediate support is revised to 27 Jan’s low of MYR3,282, followed by MYR3,244. Towards the upside, the immediate resistance is pegged at 15 Jan’s low of MYR3,423, followed by the next hurdle at MYR3,490.

Source: RHB Securities Research - 29 Jan 2021