Initiate long positions as a stronger rebound may be developing. The FCPO formed a white candle to settle MYR16 higher at MYR2,034. This was after it managed to reverse from its earlier session’s losses, the low and high were registered at MYR2,002 and MYR2,038. The closing price also crossed above our previous short positions’ trailing-stop of MYR2,030, suggesting a stronger counter-trend rebound may be developing. This counter-trend rebound is taking place to correct the commodity’s recent retracement. Hence, we switch our trading bias to positive.

Our previous short positions initiated at MYR2,084, the closing level of 30 May were closed out at the latest session at MYR2,030. On the expectation that a stronger rebound could be developing, we initiate long positions at the latest closing level. To manage risks, a stop-loss can be placed below MYR1,960, the low of 13 May.

We are still pegging the immediate support 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 - 18 Jun 2019