Maintain short positions while tightening up the stop-loss. The FCPO’s intraday tone was bearish. This was as it generally trended lower for the entire session – from a high of MYR2,055 before closing at the session’s low of MYR2,028, implying a MYR41 decline. Overall, the probability is still high that the commodity’s retracement leg, which started from the high of MYR2,344 on 7 Feb, has resumed. This is supported by our bias that the FCPO recently completed its counter-trend rebound, which was signalled by a price rejection from an area near the MYR2,124 immediate resistance. Consequently, we keep to our negative trading bias.

With the retracement still showing good signs of extending, we continue to advise traders to stay in short positions. We initiated these at MYR2,084, which was the closing level of 30 May. To manage risks, a stop-loss can now be placed at the breakeven level.

The immediate support is expected to emerge at MYR1,940, which was the low of 27 Nov 2018. This is followed by the MYR1,900 threshold. On the other hand, the immediate resistance is set at MYR2,124, ie the high of 30 Apr. This is followed by the MYR2,200 level.

Source: RHB Securities Research - 4 Jun 2019