Maintain long positions. The bulls indicated that they remain in control of the FCPO trend yesterday, after the commodity flashed out uncertain price signals due to the effect of contracts rolling over in the previous session. After gapping upwards and moving higher in the first 30 minutes, the price trended sideways for the rest of the session before closing MYR97.00 higher, at MYR3,632. We previously highlighted that it is likely the sharp correction phase is over, with a low of MYR3,160 recorded on 20 Jan, and that the FCPO is more likely extending its multi-month uptrend. This bias would stay in place, if the MYR3,440 level – slightly below the 50-day SMA line – is not breached. We maintain a positive trading bias.

We recommend that traders remain in long positions. We initiated these at MYR3,317, the closing level of 4 Feb. To manage risks, a stop-loss can now be placed below MYR3,440.

The support levels are revised to MYR3,580 and MYR3,520. Meanwhile, the immediate resistance is set at MYR3,650 and MYR3,700.

Source: RHB Securities Research - 18 Feb 2021