Maintain long positions as long as MYR2,238 is holding. Yesterday, the FCPO ended the session on the negative tone – it ended at MYR2,284, which represents a decline of MYR14. The low and high were recorded at MYR2,278 and MYR2,310. The latest weak session suggests a short-term price consolidation phase that we highlighted, is now developing in the form of a deeper retracement. However, this does not nullified the bias for the commodity to extend its rebound from the recent low of MYR2,238. We expect once this consolidation is completed – signalled by an upside break of MYR2,348 – the rebound would be extended further, with a minimum target of testing both the 30-day and 50-day SMA lines. Based on these technical interpretations, we keep to our near-term positive trading bias.

Provided the said recent low is not breached, chances are still high for the commodity to, at the minimum, test both the 30-day and 50-day SMA lines. As such, we still recommend that traders keep to long positions, initiated at MYR2,343 – the closing level of 28 Jun. To manage risks, a stop-loss can be set at MYR2,238.

Immediate support is eyed at MYR2,238, the low of 21 Jun. This is followed by MYR2,200. On the flip side, the immediate resistance is now set at MYR2,366, the high of 12 Jun. The second resistance is expected at MYR2,413, ie the high of 6 Jun.

Source: RHB Securities Research - 6 Jul 2018