Maintain long positions on the expectation of a stronger counter-trend rebound. The FCPO experienced a sharp intraday reversal in the latest session. The soft commodity reversed from a high of MYR2,059 to a low of MYR2,016, before closing at MYR2,022, indicating a decline of MYR12. Still, the possibility is strong that the commodity could extend its counter-trend rebound. This bias would remain in place provided the MYR1,960 level (the stop-loss for our ongoing long positions) is not breached towards the downside. This rebound phase has set in to correct the commodity’s prior multi-week retracement. Maintain our positive trading bias.

As we are still not seeing signs that the commodity’s counter-trend rebound has reached an end, we continue to recommend traders to stay in long positions. These were initiated at MYR2,034, which was the closing level of 17 Jun . To manage risks, a stop-loss can be placed below MYR1,960, the low of 13 May.

Towards the downside, the immediate support is set at MYR1,940, the low of 27 Nov 2018. This is followed by MYR1,900 threshold. Moving up, 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 - 19 Jun 2019