Maintain long positions. The FCPO started the session with a “Downside Gap”. Selling pressure did not ease, but continued to prevail throughout the session. The commodity dropped to a low of MYR3,461 (almost fully filling 9 Feb’s “Upside Gap), before closing MYR143.00 weaker, at MYR3,489 ie around the 50-day SMA line. The sharp decline was a negative surprise to us, as we had believed the commodity was likely extending its multi-month uptrend. Should there be a further negative price follow-through in the coming sessions (a close below the latest session’s low), our positive trading bias would be negated.

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 MYR3,461

We are revising the support levels to MYR3,461 – the latest low, followed by MYR3,441. Towards the upside, the immediate resistance is pegged at MYR3,535, followed by MYR3,570.

Source: RHB Securities Research - 19 Feb 2021