Maintain short positions on a bearish market. The FCPO decreased by MYR28 and closed at MYR2,063 yesterday, ie below the previous immediate support of MYR2,071. The intraday tone was negative as it generally trended lower, while the high and low were at MYR2,090 and MYR2,051. The commodity’s retracement leg that started from the high of MYR2,344 on 7 Feb is still in progress – after a short-lived attempt to rebound recently (which saw it briefly testing the 200-day SMA line on 4 Mar). While its Daily RSI is now approaching an oversold reading and it has filled 17 Dec 2018’s “Upside Gap”, in the absence of a price rebound signal, we maintain our negative trading bias.

As the retracement leg is not showing signs of reaching an interim low, we continue to recommend that traders stay in short positions. These were initiated at MYR2,089, the closing level of 13 Mar. To manage risks, a stoploss can be placed above MYR2,158.

The immediate support is revised to MYR1,940, the low of 27 Nov 2018. This is followed by MYR1,900, a round figure. Moving up, the immediate resistance is set at MYR2,115, the low of 28 Feb. This is followed by MYR2,217, the high of 4 Feb.

Source: RHB Securities Research - 15 Mar 2019