Bearish trend remains intact; maintain short positions. The FCPO formed a black candle yesterday, declining by MYR23 to close at MYR2,088, off the session’s high of MYR2,119 and low of MYR2,080. From a technical viewpoint, the bearish trend is likely to continue, after the commodity erased the previous day’s gains and hit its 3- year low. Furthermore, the FCPO has taken out the MYR2,100 support mentioned previously, suggesting additional selling pressure may be present in the coming sessions. Overall, we stay bearish on the FCPO’s outlook.

As seen in the chart, the immediate support level is at the MYR2,000 psychological mark. The next support is anticipated at the MYR1,863, the previous low of 25 Aug 2015. Towards the upside, we are eyeing the immediate resistance level at MYR2,193, the high of 29 Oct. Meanwhile, the next resistance will likely be at MYR2,265, determined from the previous high of 17 Oct.

Hence, we advise traders to maintain short positions, since we originally recommended initiating short positions below the MYR2,148 level on 29 Oct. In the meantime, a stop-loss can be set above the MYR2,148 threshold as well, to limit the risk per trade.

Source: RHB Securities Research - 9 Nov 2018