Maintain long positions. Yesterday, the bulls attempted to form an interim base to climb back into the MYR5,000 region. The FCPO opened on a weaker note, gapping down at MYR4,947. In the morning, it fell towards the day’s low of MYR4,905 due to strong profit-taking activities. However, the tide changed in the afternoon and it rebounded strongly, paring intraday losses to close at MYR4,959. We note that the closing level is higher than the opening price – this, coupled with a long lower shadow, indicates that the bulls were accumulating near the day’s low while selling pressure seemed to be tapering. As such, stronger buying pressure should emerge if the commodity pulls back towards the MYR4,858 level. In the immediate sessions, the FCPO may consolidate above the MYR4,858 level. As such, we are maintaining a positive trading bias until the stop-loss has been breached.

Traders should remain in the long positions, which were initiated at MYR4,899, or the closing level of 17 Nov. To manage trading risks, the stop-loss has been set at MYR4,850.

The immediate support is at MYR4,905 (22 Nov’s low), followed by MYR4,858 (16 Nov’s high). Conversely, the first resistance is pegged at MYR5,000, followed by MYR5,069 or the high of 19 Nov.

Source: RHB Securities Research - 23 Nov 2021