Maintain long positions. The FCPO retraced yesterday, falling below the 50-day SMA line. It closed MYR108.00 weaker at MYR3,916 – giving up the MYR4,000 level territory. Yesterday, the commodity gapped down to start the session at MYR3,966, and merely tapped the day’s high of MYR4,015. It then changed direction by falling to its day’s low of MYR3,886 before closing at MYR3,917. The strong bearish momentum yesterday may extend and drag the commodity to test the nearest support level of MYR3,852 before a possible rebound in later sessions. If MYR3,852 level is breached, this may open door for deeper correction towards MYR3,650. Since the stop-loss level has yet to be triggered, we stick to our positive trading bias.

We suggest traders to maintain long positions. We initiated these at MYR3,890, which is the closing level of 24 May. To manage risks, a stop-loss is pegged below the MYR3,852 level.

The support levels are unchanged at MYR3,852 (26 Apr’s low), followed by MYR3,650 – 16 Apr’s low. Towards the upside, the resistance levels are maintained at MYR4,095, and subsequently, MYR4,200, which was 3 May’s high.

Source: RHB Securities Research - 28 May 2021