Maintain long positions. Bullish momentum on the FCPO evaporated yesterday, after it shed MYR57.00 to close at MYR3,791. Initially, the commodity gapped down by MYR40.00 to start Wednesday’s session at MYR3,805 before gradually moving lower. It reached the day’s low of MYR3,760, before climbing to the high of MYR3,921. Selling pressure emerged, and dragged the commodity down to its close, forming a Shooting Star pattern. This, coupled with the Hanging Man pattern formed in a previous session led selling pressure to emerge above the MYR3,800 level. The recent rebound that started from Mar’s low of MYR3,495 is facing stiff resistance. If the commodity climbs above MYR3,870 again in the coming sessions, selling pressure may ease and there could be an upside risk. Meanwhile, if the commodity breaches MYR3,700, a downtrend may take place once more. Since the correction did not trigger the stop-loss, we maintain a positive trading bias.

We recommend that traders stay in long positions, which were initiated at MYR3,845, or the closing level of 7 Apr. To manage risks, the stop-loss is revised to MYR3,760.

The immediate support level is marked at 8 Apr’s low of MYR3,760, followed by MYR3,700. Towards the upside, the immediate resistance is set at 7 Apr high of MYR3,870 and, subsequently, 8 Mar’s high of MYR4,011.

Source: RHB Securities Research - 9 Apr 2021