RHB Research has maintained its short position recommendation on the Futures Crude Palm Oil (FCPO) contract, despite a recent recovery in prices, as the commodity continues to face resistance around the RM4,700 level.
The FCPO recorded a fresh upward movement on Monday, gaining RM26 to close at RM4,672. The contract opened at MYR4,635 before slipping to an intraday low of RM4,632, followed by a rebound to a high of MYR4,703.
RHB said the latest bullish price action, together with the Relative Strength Index (RSI) trending upwards, suggests stronger short-term momentum. However, the recovery was capped by the key resistance level at RM4,700.
The research house said that as long as FCPO remains below the MYR4,700 threshold, bearish sentiment remains dominant.
“A breakout above the immediate resistance could attract fresh buying interest and push prices towards the next resistance level of MYR4,840,” RHB said.
Despite the recent gains, RHB maintained its negative trading bias and advised traders to retain short positions initiated at RM4,481, based on the FCPO closing level on 12 May.
A stop-loss level has been placed at RM4,700 to manage trading risks.
The nearest support levels are identified at RM4,500, followed by RM4,390, while resistance remains at MYR4,700 and MYR4,840.
RHB said traders should monitor whether FCPO can sustain above the MYR4,700 mark, which would signal a possible shift in market direction.
