Maintain short positions as the bulls are attempting to retake the 200-day SMA line. The FCPO formed white candle to settle MYR8 higher at MYR2,162 and in the process, tested the 200-day SMA line. The session’s low and high were at MYR2,150 and MYR2,177. For now, we consider the positive session as a sign that the bears are taking a pause, and that the commodity’s movements in the coming sessions may be taking place in between the uptrend line (as drawn in the chart) and the said SMA. A firm downside breach of the said uptrend line would suggest the higher risk of a deeper retracement. Maintain our negative trading bias.

As the risk is still tilted towards the downside, we continue to recommend traders to stay in short positions. We initiated these positions at MYR2,154, the closing level of 11 Apr To manage risks, a stop-loss can be placed above MYR2,235.

The immediate support is eyed at MYR2,095, the low of 29 Mar. This is followed by MYR2,038, the low of 15 Mar. On the other hand, the immediate resistance is pegged at MYR2,235, the high of 5 Apr. This is followed by MYR2,344, the high of 7 Feb.

Source: RHB Securities Research - 15 Apr 2019