Maintain long positions. After breaching the immediate resistance last Friday, the FCPO continued its positive momentum, surging MYR112.00 to settle at MYR4,383 yesterday – it formed a back-to-back long white body candlestick. Initially, the commodity began Monday’s session lower at MYR4,210. After touching MYR4,205 ie the day’s low, it progressed higher and hit the intraday high of MYR4,404 just before closing at MYR4,383. With the RSI indicator curving above the 70% level, we expect the strong momentum to continue and lift the commodity higer to retest the MYR4,400 level. As the commodity is trading at an overbought level now, there may be profit taking activites ahead but expect the MYR4,200 level to act as a strong support. With this strong momentum, we maintain our bullish trading bias.

We suggest traders to remain in long positions, which were initiated at the close of 13 Jul, or MYR3,977. To manage risks, the trailing-stop is set at MYR4,100.

The immediate support level is unchanged at MYR4,200, and subsequently at MYR4,065 or 8 Jun’s high. Towards the upside, the resistance levels are fixed at the MYR4,400 round figure and MYR4,525, ie 12 May’s high.

Source: RHB Securities Research - 27 Jul 2021