Maintain short positions as long as immediate resistance is still standing. The latest session saw the FCPO form a white candle, which implied that the session was under the bulls’ control. For the intraday, the commodity moved progressively higher from a low of MYR2,271 to a high of MYR2,319, before closing at MYR2,315, a gain of MYR38. The rebound since 21 Jun – when the commodity’s RSI reached the oversold level of 25.5 – is still not able to provide a conclusive technical signal that a deeper rebound is possibly in the making. For now, we are looking for an upside break of MYR2,336 as the required signal. Until that happens, we keep our near-term negative trading bias.

The commodity is still not showing signals of developing a deeper rebound and the medium technical bias is still weak – as suggested by the 30-day and 50-day SMA lines, which are still edging lower. As such, we continue to advise traders to keep to short positions, initiated at MYR2,263, ie the closing level of 19 Jun. To manage risks, a stop-loss can be set above MYR2,336.

We expect the immediate support to emerge at MYR2,253, the low of 26 Jul 2016. The following support is at MYR2,186, the low of 12 Jul 2016. Towards the upside, the immediate resistance is now set at MYR2,336, the high of 14 Jun. This is followed by MYR2,413, the high of 6 Jun.

Source: RHB Securities Research - 28 Jun 2018