Maintain short positions while waiting for further positive price signals. The FCPO formed a second consecutive white candle in the latest session. At the closing the commodity settled above both the 200-day SMA line and uptrend line (as drawn in the chart). The session’s low and high were at MYR2,180 and MYR2,219, before closing at MYR2,205, indicating a gain of MYR32. The strong price reaction from the said uptrend line suggests a possible price reversal taking place. To confirm this, the commodity has to breach above the latest session’s high in the coming sessions. Until this happens, we keep to our negative trading bias.

Pending confirmation of a price reversal signal, we continue to recommend that traders 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 now be placed at above MYR2,219 – the latest session’s high.

The immediate support is still pegged 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 pegged at MYR2,235, the high of 5 Apr. This is followed by MYR2,344, the high of 7 Feb.

Source: RHB Securities Research - 18 Apr 2019