Maintain long positions, on expectations that the rebound has still room to go. The FCPO settled marginally higher by MYR2 to end at MYR2,098. The low and high were recorded at MYR2,078 and MYR2,112. Overall, we believe the commodity is still in the process of developing – at the minimum – a relatively strong counter-trend rebound phase. This phase set to correct the FCPO’s prior multi-week’s sharp retracement, which saw its Daily RSI recently reach an oversold reading. Considering this, we keep to our positive trading bias.

On the expectation that the countertrend rebound leg still has legs to go further, we continue to recommend traders to stay in long positions. This was initiated at MYR2,086, or the closing level of 16 May. For risk-management purposes, a stop-loss can be placed below the MYR1,960 level.

Towards the downside, the immediate support is expected at MYR1,940, or the low of 27 Nov 2018. This is followed by the MYR1,900 threshold. On the other hand, immediate resistance is now at MYR2,124, which was the high of 30 Apr. This is followed by the MYR2,200 level.

Source: RHB Securities Research - 21 May 2019