Risk of further retracement still high; maintain short positions. The FCPO advanced MYR28 to settle at MYR2,056. Trading took place between MYR2,032 and MYR2,061. Overall, the commodity’s trend is still negative and chances are still high that it is in the midst of extending the downtrend that started from the high of MYR2,344 on 7 Feb. This was after it recently completed its counter-trend rebound phase, which was completed with a price rejection from an area near the immediate resistance of MYR2,124. Based on these technical observations, we are keeping our negative trading bias.

As such, traders should remain in short positions. We initiated these at MYR2,084, the closing level of 30 May. To manage risks, a stop-loss can now be placed at the breakeven level.

Immediate support can be expected to emerge at MYR1,940, the low of 27 Nov 2018. This is followed by the MYR1,900 threshold. Meanwhile, the immediate resistance is set at MYR2,124, the high of 30 Apr. This is followed by the MYR2,200 level.

Source: RHB Securities Research - 7 Jun 2019