Maintain long positions. Optimism on FCPO pushed it to climb higher, before profit-taking took place. The commodity closed MYR89.00 higher, at MYR3,894, yesterday. It opened at MYR3,860 and then dipped to the day’s low of MYR3,845, before switching to a bullish mode until the end of the session. It touched the day’s high of MYR3,951, just before it closed at MYR3,894 – the highest level recorded this month. The strong bullish momentum reaffirms that the uptrend is still above the 50-day SMA line, ie echoing Tuesday’s Bullish Engulfing pattern. We do not discount the probability that the bears may take profit ahead, as the uptrend is still going strong. As long as the commodity stays above the stop-loss or 50-day SMA line, we stick to our positive trading bias.

We recommend traders to stay long positions, which were initiated at MYR3,590 or the close of the Jul 2021 contract on 15 Apr. To manage risks, the trailing stop is revised higher to MYR3,800.

The immediate support is marked at MYR3,800, followed by 19 Apr’s high of MYR3,726. Towards the upside, the immediate resistance is pegged at MYR3,950, followed by MYR4,000 psychological level.

Source: RHB Securities Research - 22 Apr 2021