Maintain long positions. The FCPO resumed its upward charge yesterday, after it underwent profit-taking in the previous session. After gapping up during the opening bell, the commodity generally trended higher for the remainder of the session. It registered a high of MYR3,696, moving closer to test the 15 Feb high of MYR3,720, before closing MYR132.00 higher at MYR3,676. The positive performance is an extension of the commodity’s rebound off the 50-day SMA line, following the sharp correction over 16-18 Feb – this, in part, was due to the negative effect of contracts rolling over. Towards the downside, we are now looking at MYR3,550 as the crucial near-term support – whereby a southward breach of this level would invalidate our ongoing 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 MYR3,550.

The support levels are revised to MYR3,620, and MYR3,590. Conversely, the immediate resistance is revised to MYR3,696 – the latest high, followed by MYR3,720 – the high of 15 Feb.

Source: RHB Securities Research - 24 Feb 2021