Maintain short positions. The FCPO formed a black candle which, at the closing, breached below the previous immediate support of MYR2,000. The session’s low and high were at MYR1,970 and MYR1,996, before it closed at MYR1,984 to indicate a drop of MYR26. Overall, the commodity’s retracement leg, which started from the high of MYR2,344 on 7 Feb, is still strong. The retracement also does not show signs of at least reaching an interim low – despite the oversold Daily RSI reading. Due to this, we are keeping our negative trading bias.

Until there are signs that the bears have exhausted their energy, 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 above MYR2,046, the prior session’s high.

Immediate support is revised to MYR1,940, the low of 27 Nov 2018. This is followed by MYR1,900, a round figure. Meanwhile, the immediate resistance is now pegged at MYR2,000, a round figure, followed by MYR2,124, the high of 30 Apr.

Source: RHB Securities Research - 7 May 2019