Keep long positions. The FCPO underwent a mild retracement following a recent rally, as it closed MYR45.00 lower at MYR4,604 – but remained above the immediate support of MYR4,567. The commodity opened lower at MYR4,635 but then attempted to move higher to hit the intraday high of MYR4,677 intraday high before shifting its direction southwards to close below the opening, at MYR4,604. The latest black body candlestick with a upper shadow suggests that the recent strong buying momentum has taken a paused, and the commodity is expected to rebound further in the coming sessions – since the “higher high” bullish structure remains intact. We expect the commodity to propel towards the MYR4,806 resistance, near the 50-day SMA line of MYR4,814, and maintain a positive trading bias.

Traders should remain in the long positions initiated at MYR4,649, or the closing level of 24 Dec. To manage trading risks, the initial stop-loss threshold is set at the MYR4,500 threshold.

The immediate support is still at MYR4,567, followed by MYR4,500. Towards the upside, the immediate resistance is still at MYR4,806 – 30 Nov’s high, then MYR4,949 or 8 Dec’s high.

Source: RHB Securities Research - 28 Dec 2021