Maintain long positions. The FCPO saw the bears dominating the session, declining MYR58.00 to close at MYR3,684. The commodity was gapping higher yesterday, starting the session at MYR3,817. After touching the session high at MYR3,819, it slipped to the MYR3,673 session low and last traded at MYR3,684 – forming a Bearish Engulfing pattern in the process. With the formation of this bearish reversal pattern, we will monitor to see if a negative momentum will follow through in the coming sessions. To protect the downside risk, we are raising the trailing-stop level. Meanwhile, in the bigger picture, the FCPO still exhibits an uptrend structure of higher highs and lows. As long as the trailing-stop level remains intact, we maintain a positive trading bias.

We recommend traders remain in long positions, which were initiated at MYR3,317, or the closing level of 4 Feb. To manage risks, a trailing stop is moved higher to MYR3,640.

The nearest support level maintained at MYR3,650 and followed by 24 Feb’s low of MYR3,609. Towards the upside, the immediate resistance is now pegged at 26 Feb’s high of MYR3,762 and followed by the higher hurdle of MYR3,819.

Source: RHB Securities Research - 2 Mar 2021