Maintain long positions. Although the FCPO opened lower on 16 Jul, the Oct 2021 futures contract rebounded and closed at MYR4,137, forming a white body candlestick for four consecutive sessions. Last Friday, it opened at MYR4,106 then touched the day’s low of MYR4,039 before rebounding to print the day’s high of MYR4,155. Strong buying interest emerged in the late afternoon, as intraday losses were recouped and buying interest remained intact. With the RSI still pointing upwards, the FCPO may see the bullish momentum follow through in the sessions ahead, and test the immediate resistance at MYR4,260. As such, we make no change to our positive trading bias.

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

The next two support levels are unchanged at MYR4,065 or the high of 8 Jun, and MYR4,000 – the psychological mark. The nearest resistance level is placed at MYR4,260, or the high of 3 Jun, and subsequently, at MYR4,525 (12 May’s high).

Source: RHB Securities Research - 19 Jul 2021