Initiate short positions as the risk of a further retracement has increased. The FCPO eased further in the latest session to settle further below the 200-day SMA line. The commodity generally moved lower for the whole session, while the high and low were at MYR2,180 and MYR2,148. It closed at MYR2,154, indicting a decline of MYR16. As mentioned before, a breakdown from the prior session’s low of MYR2,155 may point to a higher risk of a deeper retracement taking place. This negative bias will be enhanced if the uptrend line (as drawn in the chart) is breached in the coming sessions. We switch our trading call to negative.

Our previous long positions – initiated at MYR2,164, the closing level of 21 Mar – were closed out at the latest session, at MYR2,155. On the bias that the bears have regained control, we initiate short positions at the latest close. To manage risks, a stop-loss can be placed above MYR2,235.

The immediate support is still at MYR2,095, the low of 29 Mar. This is followed by MYR2,038, the low of 15 Mar. Moving up, the immediate resistance is now expected at MYR2,235, the high of 5 Apr. This is followed by MYR2,344, the high of 7 Feb.

Source: RHB Securities Research - 12 Apr 2019