Maintain long positions. The FCPO’s upside movement took a pause at MYR5,700 amid profit-taking on Monday. The commodity pulled back MYR36.00 to settle at MYR5,592. It initially started off on a positive note, gapping up and opening at MYR5,690. After touching the MYR5,700 day high, the selling activities kicked in, which saw the FCPO retreat to the MYR5,586 day low – it closed at MYR5,592. Despite the commodity printing a bearish candlestick, Monday session’s low was higher than the previous session’s low – a “higher low” formation indicates the bulls remain in control of the latest trend. The commodity may resort to consolidation in the coming sessions and re-test the MYR5,445 immediate support. As long as the FCPO can retain its track to chart “higher lows”, we deem the bullish structure as intact. For now, we are keeping our positive trading bias until the trailing-stop level is breached.

Traders are recommended to keep the long positions initiated at MYR4,649 or the close of 24 Dec 2021. For tradingrisk management, the trailing-stop threshold is placed at MYR5,300.

The immediate support is marked at MYR5,445 – 28 Jan’s low – and followed by MYR5,329, which was the low of 27 Jan. Conversely, the immediate resistance is sighted at MYR5,700 and followed by the higher resistance at MYR5,840.

Source: RHB Securities Research - 3 Feb 2022