Maintain short positions. The FCPO formed a black candle which breached below a confluence of support levels, ie the 200-day SMA line, the uptrend line (as drawn in the chart) and the previous low of MYR2,139. The session’s low and high were posted at MYR2,104 and MYR2,137, before it closed at MYR2,118, indicating a drop of MYR39. The said breakdowns signal the commodity’s current bout of retracement - which started from the high of MYR2,235 on 5 Apr, is still in place and may be able to be extended further. Based on this, we keep to our negative trading bias.

As the trend remains bearish and until signs of reversal emerge, we continue to recommend that traders stay in short positions. We initiated these at MYR2,154, the closing level of 11 Apr. To manage risks, a stop-loss can be placed at the breakeven level.

We still expect the immediate support to emerge at MYR2,095, the low of 29 Mar. This is followed by MYR2,038, the low of 15 Mar. Meanwhile, the overhead resistance is at MYR2,235, the high of 5 Apr – followed by MYR2,344, the high of 7 Feb.

Source: RHB Securities Research - 29 Apr 2019