Maintain long positions. The FCPO failed to stay above the 50-day SMA line earlier, after it pulled back by MYR91.00 to close lower yesterday – albeit still hovering above the stop-loss. Yesterday, it gapped down at the open at MYR3,981, and oscillated sideways between the day’s high of MYR4,012 and low of MYR3,872, before settling at MYR3,919. Despite the negative momentum witnessed throughout the session, mild buying interest emerged near the immediate support level. Breaking below the immediate support level should result in a deeper correction towards MYR3,650. As long as the commodity continues to trade above the immediate support level, we stick to a positive trading bias.

We recommend that traders remain in long positions. We initiated these at MYR4,024, the closing level of 25 May. To manage risks, the stop-loss is set below the MYR3,867 level, or 24 May’s low.

The immediate support levels are maintained at MYR3,867 (24 May’s low), followed by MYR3,650 – 16 Apr’s low. Towards the upside, the resistance levels are still at MYR4,095, then MYR4,200, which was 3 May’s high.

Source: RHB Securities Research - 1 Jun 2021