Maintain short positions as the bears are flirting with the uptrend line. The FCPO ended the latest session on the weak side. At the closing, it slid MYR20 to settle at MYR2,142, with the session’s low and high at MYR2,140 and MYR2,172. The closing level placed the commodity indecisively below the uptrend line (as drawn in the chart). Should this uptrend line be breached firmly in the coming sessions, the risk for the commodity to experience a deeper retracement would be higher – as this could suggest a negative price trend continuation from the high of MYR2,344 posted on 7 Feb. Based on these, we keep to our negative trading bias.

Given that the bears still have a clear control over the price trend, 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 stoploss can be placed above MYR2,235.

Towards the downside, the immediate support is expected to emerge at MYR2,095, the low of 29 Mar. The second support is set at MYR2,038, the low of 15 Mar. Moving up, 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 - 16 Apr 2019