Maintain long positions. The FCPO failed to sustain its earlier session’s positive tone. It slid from a high of MYR2,115 – not too far away from the immediate resistance of MYR2,124, to settle at MYR2,057, indicating a decline of MYR41. The sharp intraday reversal from an area near the said immediate resistance is a negative price signal. However, pending further negative price actions, we are keeping our positive trading bias. This is on the back of our expectation that a rebound phase is likely developing, to correct the prior multi-week’s sharp retracement – which reached an oversold Daily RSI reading recently.

As the commodity’s countertrend rebound may still be extended, traders can remain 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 set at MYR1,940, or the low of 27 Nov 2018. This is followed by the MYR1,900 threshold. Moving up, the 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 - 23 May 2019