Maintain long positions on the expectation of rebound. The FCPO managed to reverse most of its intraday losses in the latest trading to settle at MYR2,157, indicating a decline of MYR4. The low and high were posted at MYR2,141 and MYR2,176. Still, we continue to believe that the commodity is in the process of, at the minimum, developing a rebound to correct its relatively sharp decline recently – which saw several supports and SMA lines (30/50/200-day) give way. The current expectation for a rebound play would remain in place, provided the low of the “Bullish Engulfing” of MYR2,115 – as indicated in the chart is not broken. Hence, keep to our long bias.

As the case for a rebound play remains valid, we continue to suggest traders keep to long positions. These positions were opened at MYR2,189, the closing level of 1 Mar. To manage risks, a stop-loss can be placed below MYR2,115.

The immediate support is maintained at MYR2,093, the low of 26 Dec 2017. The second support could emerge at MYR1,940, the low of 27 Nov 2018. On the other hand, the immediate resistance is now set at MYR2,278, the high of 25 Feb. This is followed by MYR2,344, which was the high of 7 Feb.

Source: RHB Securities Research - 7 Mar 2019