Maintain short positions until a stronger rebound signals emerge. The FCPO formed a white candle in the latest trading session. Intraday, the commodity posted a low and high of MYR1,983 and MYR2,008, before ending at MYR1,986, a gain of MYR14. Broadly, the positive session has not altered the commodity’s weak price trend or signalled a deeper rebound possibly taking place – based on the daily chart, further positive price actions are still needed for such a validation. Both the 30-day and 50-day SMA lines, which continue to edge lower, also indicate a firm downtrend. Based on these observations, we keep to our negative trading bias.

Until we see further evidence of a deeper rebound, we continue to recommend that traders keep to short positions. We initiated these at MYR2,148, or the closing level of 26 Oct. To manage risks, a stop-loss can now be set at above the MYR2,066 mark.

Towards the downside, the immediate support remains at MYR1,863, the low of 25 Aug 2015. This is followed by MYR1,800. Moving up, the immediate resistance is expected at the MYR2,000 psychological level. This is followed by MYR2,066, the high of 16 Nov.

Source: RHB Securities Research - 21 Nov 2018