Maintain short positions until the trailing-stop is crossed decisively. The FCPO ended the latest session on a positive note. The session’s low and high were recorded at MYR1,983 and MYR2,021, before closing MYR40 higher at MYR2,008. The positive price reaction came after the commodity experienced a two-week decline. As such, this can be seen as just a minor rebound. Towards the upside, provided the commodity is still unable to cross above the trailingstop (MYR2,019) for our ongoing short positions decisively, chances for it to develop a stronger rebound would still be low. Hence, we are keeping our negative trading bias.

As the bulls are still not able to generate the required price signals to suggest that a deeper rebound is developing, we continue to 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 high of 11 Jun.

The immediate support is eyed at MYR1,940, the low of 27 Nov 2018. This is followed by 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 - 14 Jun 2019