Maintain short positions as there is no confirmation to mark the end of the multi-week correction. The commodity formed a black candle to settle marginally softer by USD1.30 at USD1,287.50. The session’s trading range was between USD1,285.90 and USD1,294.70. Broadly, we are maintaining our view that the multi-week correction phase, which started from the high of USD1,349.80 on 20 Feb, is still in development. This phase looks set to correct the previous multi-month upward move, which began from USD1,162.70 on 16 Aug 2018. Until there are clearer signs to suggest that the correction has reached an end, we maintain our negative trading bias.

As the correction phase is still not showing signs of reaching an end, we continue to recommend that traders stay in short positions. We initiated these positions at USD1,291.30, the closing level of 12 Apr. For risk management purposes, a stop-loss can be placed at the breakeven level.

Towards the downside, immediate support is expected at USD1,270.30, which was the high of 20 Dec 2018. This is followed by USD1,236.50, the low of 14 Dec 2018. On the other hand, the immediate resistance is expected at USD1,330.80, which was the high of 25 Mar. This is followed by USD1,349.80, ie the high of 20 Feb.

Source: RHB Securities Research - 30 Apr 2019