Maintain long positions. The FCPO saw another bearish session yesterday after it fell MYR24.00 to close at MYR3,767 – a level below the physcological level of MYR3,800. Last Friday, the commodity started the session at MYR3,797. During the first half of the session, it retested the MYR3,800 level and climbed to the day’s high of MYR3,868. However, during the second half of the session, it saw selling pressure emerge and fell towards the day’s low of MYR3,750 before settling in at MYR3,767 – forming a Bearish Inverted Hammer. This pattern, coupled with the Shooting Star pattern formed in the previous session, suggests that the selling pressure has heightened near MYR3,800. To resume the uptrend, the commodity needs to conquer the crucial level of MYR3,800, followed by the resistance of MYR3,870. Otherwise, a further correction may break down the support level of MYR3,760 and revert the trend into a downward movement. Since the latest correction did not trigger the stop-loss, we maintain a positive trading bias.

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

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

Source: RHB Securities Research - 12 Apr 2021