Maintain long positions. The FCPO jumped off to test its immediate resistance yesterday, reclaiming territory above the 50-day SMA line. The commodity printed a black candle despite closing MYR94.00 stronger, at MYR4,010 – moving back into the MYR4,000 level. Last Friday, it gapped up to begin the session at MYR4,039, and oscillated sideways between MYR4,061 and MYR3,988 before settling at MYR4,010. The strong bullish momentum, with a gap up, in the latest session strengthened the rebound that kicked in on 25 May. Coupled with a “higher low” pattern recently, the commodity may likely still travel towards its immediate resistance of MYR4,095 – breaching this will form a “higher high” pattern and further enchance the bullish momentum. Premised on this, we are maintaining a positive trading bias.

We recommend that traders remain in long positions. We initiated these at MYR3,890, which is the closing level of 24 May. To manage risks, the stop-loss is revised to below the MYR3,867 level or 24 May’s low.

The immediate support levels are revised to MYR3,867 (24 May’s low), followed by MYR3,650 – 16 Apr’s low. Towards the upside, the resistance levels remain unchanged at MYR4,095, and subsequently, MYR4,200, which was 3 May’s high.

Source: RHB Securities Research - 31 May 2021