Maintain short positions as the bears are still in control. The FCPO formed a black candle in the latest trading and in the process tested the immediate support of MYR2,095. The commodity closed at MYR2,095, indicating a decline of MYR14, while the low and high were posted at MYR2,092 and MYR2,124. The negative session indicates the retracement leg that started from the high of MYR2,235 on 5 Apr is still developing – this was after the commodity recently breached below both the 200-day SMA line and intermediate-term uptrend line (as drawn in the chart). With no indications that the bears have become exhausted, we maintain our negative trading bias.

As the bias is still tilted towards the downside, 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.

Immediate support is still pegged at MYR2,095, the low of 29 Mar. This is followed by MYR2,038, the low of 15 Mar. Conversely, the immediate resistance is expected at MYR2,235, the high of 5 Apr – followed by MYR2,344, the high of 7 Feb.

Source: RHB Securities Research - 2 May 2019