Maintain long positions as the retesting of the 200-day SMA line is still likely. The FCPO settled MYR7 higher at MYR2,113. This was after it swung between a low and high of MYR2,098 and MYR2,121. We still deem the commodity’s over 1-week’s retracement as just a consolidation phase to correct its previous rebound that took place between 15 Mar and 21 Mar. Towards the upside, we are still expecting the commodity to retest the 200- day SMA line, once the said consolidation phase reaches an end. However, the latest positive performance was not strong enough to signal such a possibility yet. Based on these observations, we are keeping our positive trading inclination.

On the expectation that commodity is likely to extend its rebound leg towards the 200-day SMA line, we continue to recommend that traders stay in long positions. These were initiated at MYR2,164, which was the closing level of 21 Mar. A stop-loss can be placed below MYR2,038.

We are keeping the immediate support at MYR2,038, the low of 15 Mar. Breaking this may see the market retrace towards MYR1,940, the low of 27 Nov 2018. On the other hand, the immediate resistance is expected to emerge at MYR2,217, the high of 4 Feb and near the 200-day SMA. This is followed by MYR2,278, which was the high of 25 Feb.

Source: RHB Securities Research - 2 Apr 2019