Maintain short positions until signals for a deeper rebound show up. The FCPO ended the latest session on the strong side to cross above the previous immediate resistance of MYR2,000. It settled MYR56 higher at MYR2,040, slightly below the session’s high of MYR2,042. The strong session came after the commodity’s recent sharp retracement sent its Daily RSI into an oversold reading. In the coming sessions, should it manage to crack above the MYR2,046 mark (the trailing-stop for our ongoing short positions), this would imply that chances are high that the commodity has reached an interim low – hence a deeper rebound may develop. Until this happens, we keep to our negative trading bias.

Pending confirmation 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 high of 3 May.

Immediate support is kept at MYR1,940, the low of 27 Nov 2018. This is followed by MYR1,900, a round figure. Towards the upside, the immediate resistance is now set at MYR2,124, the high of 30 Apr. This is followed by MYR2,235, the high of 5 Apr.

Source: RHB Securities Research - 8 May 2019