Stop-loss triggered; initiate long positions. The FCPO shifted into positive gear on Wednesday, and rose by MYR311.00 to settle at MYR4,511. The commodity started the session stronger, gapping up to open at MYR4,300 and stayed sideways throughout the morning. After Malaysian Palm Oil Board released the plantation statistics at noon, the FCPO reacted positively – it resumed trading in the afternoon with another gap-up, and rose to test the day’s high of MYR4,548 before closing. Trading sentiment turned positive again, after the FCPO breached the MYR4,300 level and printed a white body candlestick. As the bulls are driving the market, the momentum should follow through to test the immediate resistance levels of MYR4,525, then MYR4,700. As the stop-loss threshold has been breached, we now have a positive trading bias.

We closed out the short positions that were initiated at MYR4,308, or the closing level of 28 Jul, after the stop-loss of MYR4,300 was triggered. Conversely, we also initiated long positions at the closing level of 11 Aug, or MYR4,511. To mitigate trading risks, an initial stop-loss has been set at MYR4,195.

The nearest support is at MYR4,366, the low of 30 Jul, followed by the lower support of MYR4,195 or the low of 9 Aug. Towards the upside, the immediate resistance is pegged at MYR4,525, the high of 12 May, followed by MYR4,700.

Source: RHB Securities Research - 12 Aug 2021