Maintain long positions. The FCPO continued its positive momentum for the second consecutive day, closing MYR152 stronger, at MYR4,173. It began slightly lower at MYR3,995, and tapped the day’s low at MYR3,980 before it changed direction and headed north. It then tested the intraday’s high of MYR4,189 before settling at MYR4,173. The latest price action indicates a strong positive momentum that has breached the immediate resistance level – this reaffirms the bullish bias above the MYR4,000 territory, which is expected to sustain in the medium term. As the RSI is approaching the 70% level, this momentum is expected to extend further before a retracement occurs at the overbought territory – above the 70% level. At this juncture, we stick to our positive trading bias.

We keep to our long positions, which were initiated at the close of 13 Jul, or MYR3,977. To manage risks, the stop-loss is revised upwards to the MYR4,000 psychological mark.

The support levels are revised to MYR4,065 or the high of 8 Jun, and MYR4,000 – the psychological mark. The immediate resistance level is pegged at MYR4,260 (the high of 3 Jun), and subsequently, at MYR4,525 (the high of 12 May).

Source: RHB Securities Research - 16 Jul 2021