Maintain long positions. Tracking its commodity peers overnight, the FCPO saw a strong gap-up yesterday. Although it pared some intraday gains, it added MYR111.00 to settle at MYR3,710. On Thursday, it started the session at MYR3,737 before testing the intraday high of MYR3,763. The commodity then gradually moved lower throughout the session, touching its lowest point of MYR3,703 before closing at MYR3,710 – forming a fresh Shooting Star pattern. This represents the second consecutive bearish reversal pattern – suggesting that an interim top is imminent in the immediate term. To protect against downside risks, we move the trailing-stop higher. Until the threshold is triggered, we will ride on the bullish momentum and stick to our positive trading bias.

We suggest traders stay in long positions. We initiated these at 25 Jun’s close of MYR3,520. To manage risks, the trailing-stop threshold is set at MYR3,650.

The support levels are adjusted to MYR3,650, the low of 16 Apr, followed by MYR3,586 or the low of 30 Jun. Towards the upside, the two resistance levels are set at MYR3,800 and MYR3,900.

Source: RHB Securities Research - 2 Jul 2021