Maintain short positions. The FCPO charted a downtrend yesterday, with a low and high of MYR2,153 and MYR2,177. It closed at MYR2,171, indicating a decline of MYR22. The weak session further strengthens our bias that the commodity is at risk of resuming its YTD downtrend – to be confirmed by a firm breach of the immediate support of MYR2,137. This negative bias is further supported by the commodity ,which continues to trade below both the 30-day and 50-day SMA lines. Based on these observations, we maintain our near-term negative trading bias.

As the risk of the commodity continuing its YTD downward move is growing, we continue to recommend traders to keep to short positions. We initiated these positions at 8 Oct’s closing level of MYR2,187. For risk management purposes, a stop-loss can be placed above MYR2,235.

The immediate support is at MYR2,137, the low of 20 Sep. This is followed by MYR2,100. Moving up, the immediate resistance is set at MYR2,235, the high of 5 Oct. This is followed by MYR2,303, the high of 5 Sep.

Source: RHB Securities Research - 12 Oct 2018