Stop-loss triggered; initiate short positions. The FCPO failed to sustain at the 50-day SMA line yesterday after it plunged MYR117 to close at MYR3,650 – below the crucial level of MYR3,700. Yesterday, the commodity started the session at MYR3,780 and during the first half, it barely touched the high of MYR3,791, before turning south. Selling pressure accelerated during the second half of the session after it gapped down and fell to its low of MYR3,642 before settling at MYR3,650. The latest price action has confirmed the formation of the Shooting Star pattern on 8 Apr, where the recent upward movement ended with an interim top at MYR3,921. This also affirms that the MYR3,800 level will be a tough resistance to cross in the coming sessions. Meanwhile, breaching the 50-day SMA line may see the negative momentum following through to reach the lower support at MYR3,572, followed by MYR3,510. Since the stop loss is breached, we are shifting over to a negative trading bias.

We closed out the long postions, which were initiated at MYR3,845, or the closing level of 7 Apr, after the stop loss was triggered at MYR3,760. Conversely, we initiate short positions at the closing level of 12 April at MYR3,650. To manage risks, an initial stop loss is placed above MYR3,800.

The nearest support level is revised to 30 Mar‘s close of MYR3,572, followed by 31 Mar’s open of MYR3,510. Towards the upside, the immediate resistance is now pegged at 6 Apr’s low of MYR3,716, followed by the psychological level of MYR3,800.

Source: RHB Securities Research - 13 Apr 2021