Stay in short positions. Buying interest emerged near the 50-day SMA line, and the FCPO gained MYR76.00 to close at MYR3,726 yesterday. After a sharp sell-off on Monday, it opened yesterday with a gap-up, at MYR3,663. It touched the day’s low of MYR3,654, then headed north to test the day’s high of MYR3,757, before settling at MYR3,726. The latest price formation – Bullish Harami, formed near the 50-day SMA line – indicates that the bulls are not giving up and the uptrend is still in place. Since the moving average is pointing up and trending higher, the upward movement may resume if the commodity breaches above the resistance of MYR3,800. Meanwhile, if the price drops below MYR3,642, it may negate the Bullish Harami and revert to a downward movement. We are maintaining a negative trading bias until the stop-loss is breached.

We recommend that traders stick to short positions, which were initiated at the closing level of 12 April, at MYR3,650. To manage risks, a stop-loss is set above MYR3,800.

We revise the immediate support to 12 Apr’s low of MYR3,642, followed by 30 Mar‘s close of MYR3,572. Towards the upside, the immediate resistance is now pegged at the psychological level of MYR3,800, followed by 7 Apr’s high of MYR3,870.

Source: RHB Securities Research - 14 Apr 2021