Maintain short positions on expectation that the 200-day SMA line would be tested. The FCPO added MYR13 to close at MYR2,286 – the low and high were registered at MYR2,274 and MYR2,294. The positive session can be seen as a sign of the bears are taking a breather. No price signal has been sighted to indicate the retracement leg, which started from the high of MYR2,344 on 7 Feb, is reaching an end. Towards the downside, we are expecting, at the minimum, the 200-day SMA line to be retested. Hence, we maintain our negative trading bias.

Given the bias is still tilted towards further downside to correct the commodity’s prior multi-week upward move, 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.

Towards the downside, the immediate support is expected at the MYR2,200 mark, a round figure. The following support is targeted at MYR2,134, the low of 14 Jan. On the other hand, the immediate resistance is expected at MYR2,344, the high of 7 Feb. This is followed by MYR2,400.

Source: RHB Securities Research - 19 Feb 2019