Stop loss triggered; initiate long positions. The FCPO saw the bullish momentum continuing, rising MYR43.00 to settle at MYR3,845. The commodity gapped MYR58.00 higher yesterday to start the session at MYR3,860. From the day’s high of MYR3,870, the bears were taking profit before the FCPO found footing at MYR3,799. During the afternoon session, the bulls pared earlier losses to close at MYR3,845 – forming a Hanging Man bearish pattern. This is an early sign that the recent rebound movement may have peaked. However, we need to see a downward price action to confirm the formation of a bearish reversal pattern. Meanwhile, if the current bullish momentum extends and breaches the MYR3,870 immediate resistance, the commodity may travel towards 8 Mar’s high MYR4,011 – or at least retest the MYR4,000 psychological level. Since the stop loss is breached, we shift to a positive trading bias.

We closed out the short positions that were initiated at MYR3,692, or the closing level of 26 Mar. Conversely, we initiate long positions at the closing level of 7 Apr. To manage risks, initial stop loss is placed below MYR3,695.

The immediate support level is revised to the round figure of MYR3,800, followed by MYR3,700. Towards the upside, the immediate resistance is pegged at 7 Apr high of MYR3,870 and followed by 8 Mar’s high of MYR4,011.

Source: RHB Securities Research - 8 Apr 2021