Maintain short positions until interim low is confirmed. The FCPO settled MYR32 lower at MYR2,005 yesterday. This was after trading ranged between MYR2,001 and MYR2,039. At this juncture, we think the downside risk likely to be capped in the near term – since the commodity is still near the oversold Daily RSI reading. Until there is confirmation that the interim low has been reached and the commodity is set for a stronger rebound, we maintain our negative trading bias.

Until there are clear signals that the recent retracement has ended, 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 MYR2,058, the high of 8 May.

Towards the downside, immediate support is set at MYR1,940, the low of 27 Nov 2018. This is followed by MYR1,900. Moving up, the immediate resistance is set at MYR2,124, the high of 30 Apr. This is followed by MYR2,235, the high of 5 Apr.

Source: RHB Securities Research - 10 May 2019