Maintain short positions while tightening up risk management. The FCPO added MYR13 to close at MYR2,007. Trading took place in the range of MYR1,995 and MYR2,019. The latest positive session can be seen as just a minor rebound after the recent retracement. Overall, the commodity’s weak price trend that started from the high of MYR2,344 on 7 Feb is still firmly in place. Downside risk would further increase should the commodity fail to engineer a rebound in the coming sessions. We maintain our negative trading bias.

In the absence of price reversal signals, chances are still high for the commodity to retest the immediate support of MYR1,940. As such, we recommend traders 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 above MYR2,019, the latest session’s high.

The immediate support is set at MYR1,940, the low of 27 Nov 2018. Breaking this may see the market fall back to MYR1,900 threshold. On the other hand, 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 - 12 Jun 2019