Trailing-stop triggered; initiate long positions. The FCPO climbed above the 200-day SMA line, amid rising MYR99 higher to settle at MYR3,520 on last Friday. The commodity begun with a gap up at MYR3,472, then printed an intraday low of MYR3,442. It then changed direction northwards, and recorded an intra-day high of MYR3,526, just before ending the week at MYR3,520. The latest positive momentum indicates that the bulls have just started to be in control for the next coming sessions. Considering the FCPO remains above the long term average line, the sentiment may turn positive. However, the RSI is still below the 50% threshold, and if the selling pressure picks up again, MYR3,350 may provide downside support. Since the commodity has breached the previous trailing-stop level, we shift our negative trading bias to positive.

Our previous short positions – initiated at MYR4,049 or the closing level of 8 Jun – were closed out in the latest session. Concurrently, we initiate long positions at the latest closing (25 June) of MYR3,520. To manage risks, the stop-loss is set below MYR3,350.

The immediate support level is revised at MYR3,350 or 21 Jun’s low, then MYR3,251, or 18 Jun’s low. Towards the upside, the resistance levels are maintained at MYR3,550 – the high of 14 Jun and MYR3,650 or 16 Apr’s low.

Source: RHB Securities Research - 5 Jul 2021