Maintain short positions. The FCPO shed MYR22 to close at MYR1,983 last Friday, with the day’s low and high at MYR1,981 and MYR2,019. As a trend, the retracement leg that started from 7 Feb’s failed attempt to breach above the long-term downtrend line (please refer to our report dated 22 Feb) is still showing signs of extending. We note that the commodity’s current bout of retracement has, again, flashed an oversold Daily RSI reading – a further retracement in the immediate term will likely come with a negative divergence. However, in the absence of a positive price action that confirms an interim low is in place, we keep to our negative trading bias.

As the bears are still in control and in the absence of price reversal signals, traders can remain 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.

Immediate support is set at MYR1,940, the low of 27 Nov 2018. This is followed by MYR1,900. Conversely, 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 - 13 May 2019