Maintain long positions. The FCPO recorded its eighth consecutive positive session, rising MYR65.00 to close at MYR4,125 and printing a fresh 2021 high. Last Friday, it gapped up by MYR60.00 and opened at MYR4,120, then gradually climbed towards the day’s high of MYR4,153 before falling towards the day’s low of MYR4,065. In the afternoon, the bulls recouped earlier losses. Based on the latest price action, buyers showed significant strength and there were no signs of reversal yet. As the commodity has undergone a sharp rally, coupled with the RSI being in overbought territory, the risk of a correction is growing. If the FCPO drops below 12 Mar’s low of MYR4,065, it may pull back towards MYR4,000. Meanwhile, if it pushes upwards past the recent high of MYR4,153, the FCPO may shift further towards MYR4,200. We maintain a positive trading bias, until the trailing-stop is breached.

We recommend that traders stick to long positions, which were initiated at MYR3,878, or the closing level of 8 Mar. To manage risks, the trailing-stop is placed below MYR4,100.

The nearest support level is revised to MYR4,000, followed by the round figure of MYR3,900. Towards the upside, the immediate resistance is now pegged at 12 Mar’s high of MYR4,153, followed by MYR4,200.

Source: RHB Securities Research - 15 Mar 2021