Maintain long positions as the commodity still has yet to move to a fresh low. The FCPO formed a black candle to close MYR24 weaker at MYR1,998. The session’s trading range was between MYR1,995 and MYR2,009. Broadly, we are still expecting the commodity to extend its counter-trend rebound. Towards the upside, there is a fair chance for this rebound to – at the minimum – test the downtrend line (as drawn in the chart). This rebound phase set in to correct the commodity’s prior multi-week retracement. This bias would remain provided the MYR1,960 level (the stop-loss for the ongoing long positions) is not breached to the downside. Maintain our positive trading bias.

Given that chances for the commodity to move to a new low is slim at this juncture, 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.

The immediate support is expected at MYR1,940, the low of 27 Nov 2018. This is followed by the 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 - 25 Jun 2019