Maintain short positions as the bears are pressing ahead. The FCPO performed weakly in the latest session. It formed a black candle which at the closing, breached below the previous immediate support of MYR2,137, thus marking a new YTD lowest closing. The session’s low and high were posted at MYR2,118 and MYR2,145, before closing at MYR2,124, implying a decline of MYR29. As mentioned before, a breach of the said previous immediate support would signal the resumption of the commodity’s YTD negative price trend. This negative bias is further supported by the fact that the commodity is now trading firmly below both the 30-day and 50-day SMA lines. As such, we maintain our negative trading bias.

As the YTD negative price trend is extending without signs of ending, we continue to recommend that traders keep to short positions. We initiated these positions at MYR2,148, the closing level of 26 Oct. For risk management purposes, a stop-loss can be placed at MYR2,193.

The immediate support is revised to the MYR2,100 mark, a round figure. This is followed by MYR2,000, also a round figure. Towards the upside, the immediate resistance set at MYR2,193, the high of 29 Oct. This is followed by MYR2,265, the high of 17 Oct.

Source: RHB Securities Research - 7 Nov 2018