Maintain long positions. The FCPO continued to move further below from the the 50-day SMA line, after it fell MYR28.00 to end lower yesterday at MYR3,891. On Tuesday, it opened slightly higher at MYR3,952, and then touched the day’s high at MYR3,976 before moving downwards to tap the day’s low at MYR3,852 and closing lower. Despite the negative momentum witnessed throughout the session, mild buying interest emerged in the late session to hold the support. Since the RSI has fallen below the 50% threshold, the probability of seeing a technical rebound near the 50- day SMA line is low. Hence, traders need to be cautious if it falls below the MYR3,867 support level where we might see a deeper correction in the coming sessions. However, as it is still trading above the immediate support level, we maintain our positive trading bias.

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

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

Source: RHB Securities Research - 2 Jun 2021