Maintain long positions, as the “Bearish Harami” formation is likely just a sign of minor consolidation. The precious metal failed to sustain its earlier session’s positive posture. It slid from a high of USD1,310.10 to settle at USD1,302.10, indicating a decline of USD5.60. Consequently, a “Bearish Harami” appeared. At this juncture, we are seeing the said formation as just an indication that the commodity is taking a minor consolidation – after the prior session’s breakout from the downtrend line (as drawn in the chart). Looking at the longer horizon, chances are high that it is in the process of extending its upward move that started from the low of USD1,162.70 on 16 Aug 2018. Maintain our positive trading bias.

As we see the latest weak session as a healthy consolidation, we continue to recommend traders stay in long positions. These were initiated at USD1,290.20, which was the closing level of 1 May. A stop-loss can now be placed at the breakeven level.

Towards the downside, immediate support is set at USD1,267.90, or the low of 23 Apr. This is followed by USD1,236.50, ie the low of 14 Dec 2018. On the other hand, the immediate resistance is set at USD1,330.80, which was the high of 25 Mar. This is followed by USD1,349.80, or the high of 20 Feb.

Source: RHB Securities Research - 15 May 2019