Stay short until the bulls cross the immediate resistance. The FCPO performed positively in the latest session – at one point it came near to test the immediate resistance of MYR2,058. The session’s low and high were posted at MYR2,021 and MYR2,050, before settling MYR15 higher at MYR2,029. The latest’s gain was a positive follow-through from the 13 May’s positive intraday reversal, which took place after the commodity’s recent weeks of sharp retracement that sent its daily RSI into an oversold reading. However, to signal that an interim is in place and the commodity is ready to stage a deeper rebound, based on the daily chart, the bulls need to cross the said immediate resistance. Pending this, we keep to our negative trading bias.

Until there is a confirmation that the bulls have regained control over the price trend, 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.

We are still expecting the immediate support at MYR1,940, the low of 27 Nov 2018. This is followed by MYR1,900. Conversely, the immediate resistance is set at MYR2,058, the high of 8 May. This is followed by MYR2,124, the high of 30 Apr.

Source: RHB Securities Research - 16 May 2019