Crude palm oil futures (FCPO) resumed their upward momentum on Friday, with RHB Research maintaining a positive trading bias as improving technical indicators point to further upside towards the RM5,000 level.
The commodity gained RM78 to close at RM4,894 after opening at RM4,825. It initially fell to an intraday low of RM4,799 before rebounding strongly to reach RM4,908 and ending the session with a bullish candlestick.
RHB said the positive price action, coupled with a rising Relative Strength Index (RSI), indicates that the uptrend is gaining strength.
Should the rebound continue, FCPO could advance towards the first resistance level of RM5,000.
A decisive breakout above that level would improve market sentiment and potentially pave the way towards the next resistance at RM5,100.
The research house also believes the recent correction has run its course following the formation of Friday’s bullish candlestick and the earlier rejection near the 50-day simple moving average.
“The correction is deemed completed upon the formation of the bullish candlestick, following the rejection near the 50-day SMA line,” RHB said.
Against this backdrop, the research house maintained its positive trading bias and advised traders to hold on to long positions initiated at RM4,710 at the close on July 23.
RHB placed its stop-loss level at RM4,700 to manage downside risks.
Following the latest breakout, the first support is pegged at RM4,700, followed by RM4,600.
On the upside, RM5,000 remains the immediate resistance to watch. A successful break above that psychological level would expose FCPO to the higher resistance target of RM5,100.
