Maintain long positions on the expectation of a counter-trend rebound being extended. The FCPO traded in a relatively narrow range vs the prior two sessions, between MYR1,993 and MYR2,018, before closing at MYR2,014. This signifies a dip of MYR3. While the price retracement from the area near the immediate resistance of MYR2,124 in the prior two sessions has been relatively sharp, we still expect the commodity to extend its counter-trend rebound, correcting the prior multi-week sharp decline. This bias should stay in place if the MYR1,960 (the stop-loss for our ongoing long positions) point is not breached. We maintain our positive trading bias.

On the expectation that the commodity is still able to stage a 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 at MYR1,940, the low of 27 Nov 2018. The following support is expected at the MYR1,900 threshold. Moving up, 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 - 27 May 2019