Maintain long positions. Although the FCPO had a strong opening yesterday, it shaved down intraday gains and declined MYR39.00 to close at MYR4,408. The commodity initially had a strong start, gapping higher to open at MYR4,518. Strong selling momentum emerged after the session resumed in the afternoon, and the index fell to touch the MYR4,363 day low, before rebounding to close above the MYR4,400 level. The latest bearish candlestick has engulfed the previous session’s candlestick, showing that the bears were in control of the session. Breaching the MYR4,400 support level may see negative momentum follow through to retest the lower support of MYR4,300. Until the stop-loss level is crossed, we make no change to our positive trading bias.

We recommend that traders remain in long positions, which were initiated at MYR4,511 or the closing level of 11 Aug. To manage trading risks, the stop-loss is set at MYR4,300.

The immediate support is at MYR4,400, then lower support at the MYR4,300 round figure. On the other hand, the immediate resistance has been revised to MYR4,460 – the low of 12 Aug – followed by MYR4,525, or the high of 12 May.

Source: RHB Securities Research - 18 Aug 2021