Maintain long positions. The FCPO attempted to mark a new high level yesterday but then reversed and fell strongly towards the close – falling MYR81.00 to settle at MYR5,536. The commodity opened higher at MYR5,722, but – after touching the MYR5,749 intraday high – strong selling pressure kicked in to swiftly reverse the FCPO downwards towards hitting the day’s low of MYR5,446 before the commodity rebounded moderately towards the close. The latest negative momentum from the top signals that the bearish reversal is poised to occur. With the RSI weakening further from above 70% to the 65% level, this signals that the bears might be in control in the later sessions. However, since the FCPO has yet to breach the trailing-stop or immediate support level, we stick to our bullish trading bias.

We advise traders to retain the long positions initiated at MYR4,649 or the close of 24 Dec 2021. To minimise the trading risks, the trailing-stop threshold is fixed at MYR5,445.

The immediate support set at MYR5,445 – 28 Jan’s low – and followed by the subsequent support of MYR5,329, ie the low of 27 Jan. Conversely, the nearest resistance is eyed at MYR5,700 – the recent high – and followed by the MYR5,840 new high.

Source: RHB Securities Research - 8 Feb 2022