Maintain short positions. The FCPO weakened MYR12 to close at MYR2,254 in the latest trading. Intraday, the low and high were posted at MYR2,247 and MYR2,268. The latest performance marked the third consecutive negative closing. This is supportive to our bias that the commodity in the process of correcting its relatively sharp upward move that took place from the low of MYR1,940 on 27 Nov 2018 up till the recent high of MYR2,344 on 7 Feb. We are expecting this retracement to, at the minimum, reach the 200-day SMA line level. The daily RSI, which broke the support line (as drawn in the chart), is lending further support to our negative trading tone.

With the commodity’s retracement leg is still progressing and moving towards the 200-day SMA line, traders should stay in short positions. These were initiated at MYR2,290, the closing level of 8 Feb. To manage risks, a stop-loss can be placed above MYR2,344.

The immediate support is eyed at MYR2,200, a round figure. The following support is at MYR2,134, the low of 14 Jan. Conversely, the immediate resistance is expected at MYR2,344, the high of 7 Feb. This is followed by MYR2,400.

Source: RHB Securities Research - 13 Feb 2019