Maintain long positions. Since forming a bullish Marubozu, the FCPO extended its upward movement for the third consecutive session yesterday, surging by MYR122.00 to close at MYR5,036. It opened at MYR4,907, then progressed upwards. Amidst strong buying momentum, the commodity broke past the MYR5,000 psychological level to reach the session’s high of MYR5,047 before the close. With the momentum at full throttle, we may very likely see a follow through price action that would retest 3 Nov’s high of MYR5,086. Breaching the threshold would set a path to test the all-time high of MYR5,220. On the other hand, if the bears decide to take profits, expect the MYR4,800 level to act as a strong support. At this stage, the bulls are not showing any signs of fatigue yet, so we are maintaining a positive trading bias.

We recommend that traders hold on to the long positions initiated at MYR4,649 – the closing level of 24 Dec. To mitigate the trading risks, the trailing-stop has been fixed at MYR4,780.

The immediate support has been revised to MYR4,950, followed by MYR4,800. Conversely, the nearest resistance is at MYR5,086 – 3 Nov 2020’s high – and followed by MYR5,220 ie the all-time high.

Source: RHB Securities Research - 6 Jan 2022