Maintain long positions. Despite strong profit-taking activities yesterday, the FCPO underwent a strong rebound from the support, rising MYR145.00 to close at MYR5,594. Yesterday, it opened on weak sentiment, gapping down at MYR5,415. Not long after the morning session began, the commodity printed the intraday low of MYR5,291. Then, the tide changed, lifting the commodity higher throughout the session and touched the day’s high of MYR5,612 day high before closing. In the latest session, the bulls overwhelmed the bears. Note that the Malaysia Palm Oil Board’s (MPOB) January statistics are scheduled to be publicised on 10 Feb. If the positive price action follows through, the commodity may test the immediate resistance of MYR5,626, followed by MYR5,700. If the FCPO retraces below the MYR5,445 support again, this may attract further selling pressure. At this stage, since the immediate support remains intact, we make no change to our positive trading bias.

Traders should remain in the long positions initiated at MYR4,649 or the close of 24 Dec 2021. To protect the downside risks, the trailing-stop is set at MYR5,445.

The immediate support remains at MYR5,445 or 28 Jan’s low, followed by MYR5,329 or the low of 27 Jan. Towards the upside, the first resistance has been revised to MYR5,626 – 4 Feb’s high – followed by MYR5,700 or the high of 31 Jan.

Source: RHB Securities Research - 10 Feb 2022