Maintain long positions to ride on the counter-trend rebound. The FCPO formed a white candle to settle at MYR2,025 yesterday, indicating a gain of MYR12. This was after it ranged between a low and high of MYR2,020 and MYR2,044. Overall, we still believe there is a high possibility the commodity will extend its counter-trend rebound phase after it recently reached a low of MYR1,960 (the stop-loss for our ongoing long positions). This expected rebound phase is meant to correct its prior multi-week sharp retracement, which saw its Daily RSI reaching an oversold level. For now, provided the said recent low is still in place, we keep to our positive trading bias.

As the latest session continues to point to the likely extension of a rebound, traders should remain in long positions. This was initiated at MYR2,086, the closing level of 16 May. To manage risks, a stop-loss can be placed below the MYR1,960 level.

Towards the downside, immediate support is set 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 - 28 May 2019