Maintain long positions. The FCPO gave up a good part of its intraday gains to settle MYR22 higher at MYR3,544. After hitting a high of MYR3,618 during the opening minutes, the commodity experienced selling pressure and was not able to stage a meaningful rebound. The sharp retracement from the intraday high suggests possible profit taking following the commodity’s rebound off the recent low of MYR3,461 – a price level slightly below the 50-day SMA line. Based on recent price actions, we now believe provided the MYR3,500 threshold does not breach towards the downside, the risk for a deeper correction to develop would remain contained. Hence, we are keeping our 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 MYR3,500.

The support levels are maintained at MYR3,500 and MYR3,461 – the low of 18 Feb. On the upside, the immediate resistance is revised to 3,560, followed by MYR3,600.

Source: RHB Securities Research - 23 Feb 2021