Maintain long positions. The FCPO saw profit taking activites by the bears continue during Monday’s session, declining MYR47.00 to settle at MYR4,394. On the first trading session of the week, the commodity saw positive sentiment during the opening, gapping higher to start at MYR4,470 and touching the MYR4,488 day high. However, the bullish momentum was short-lived, and the commodity turned south after touching the intraday high. It dropped to the MYR4,355 day low just before the close. As the RSI indicator is rounding down, there is a possibility of seeing the negative momentum extend in the coming sessions. In case the downside correction occurs, we think the MYR4,320-pt level will offer a strong immediate support. Breaching this threshold may see the commodity fall below the 50-day SMA line and dent market sentiment. As long as the commodity continues to trade above the moving average, the FCPO will resume its upward movement after the profit taking activities end. Hence, we make no changes to our bullish bias, for now.

Traders should retain their long positions initiated at the closing level of 22 Sep, or MYR4,330. For risk management, the stop-loss is placed at MYR4,290.

The immediate support is revised to MYR4,320 – the low of 23 Sep – followed by the MYR4,200 round figure. On the flip side, the immediate resistance remains at MYR4,480, or the high of 8 Sep, followed by the higher resistance of the MYR4,600 round figure.

Source: RHB Securities Research - 28 Sept 2021