Maintain long positions. The FCPO wrote off intraday gains yesterday to close MYR63.00 weaker at MYR4,778 – crossing below the 50-day average line (MYR4,862). The commodity opened at MYR4,840 and moved sideways during the early session. Strong buying momentum emerged during the early hours to lift the commodity to print the day’s high of MYR4,916. The momentum then reversed during the evening session, and the FCPO drifted downwards to the day’s low of MYR4,764 before closing. The bearish candlestick with an upper shadow below the 50-day average line indicates that the bulls are struggling to maintain their momentum in the immediate term. As such, we expect profit-taking to continue towards the immediate support of MYR4,734 before rebounding higher above the average line in the medium term. Although the early signs of weakness are becoming more apparent, we will maintain a positive trading bias until the stop-loss is triggered.

We recommend that traders stick to long positions, initiated at MYR4,929 or the closing level of 7 Dec. To mitigate the downside risks, the initial stop-loss is pegged at MYR4,700.

The immediate support is set at MYR4,734 (6 Dec’s low), followed by MYR4,567 (2 Dec’s low). Meanwhile, the nearest resistance is eyed at MYR4,949 – 8 Dec’s high – then MYR4,995 or the high of 25 Nov

Source: RHB Securities Research - 10 Dec 2021