Maintain long positions. The FCPO formed a second consecutive black candle after it came close to the immediate resistance of MYR2,124 in the prior session. The session saw the commodity hit a low of MYR2,012, before settling MYR41 lower at MYR2,016. The latest two weak sessions from around the said immediate resistance points to a possible price rejection. That said, if the MYR1,960 (the stop-loss for our ongoing long positions) point is not breached, we are keeping our positive trading bias. This bias is premised on our expectation that the commodity is poised for a counter-trend rebound to correct its prior multi-week sharp retracement, which reached an oversold level recently.

As the bears have yet to invalidate the bias for the rebound extension, 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.

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

Source: RHB Securities Research - 24 May 2019