Counter-trend rebound could still carry on; maintain long positions. The FCPO experienced a weak session. Intraday, it generally trended lower from a high of MYR2,010 to a low of MYR1,972, before closing at MYR1,981 – a drop of MYR17. Still, we continue to see a fair chance for the counter-trend rebound to extend – this is to correct the commodity’s prior multi-week retracement leg. This bias would stay, provided the MYR1,960 level does not breached towards the downside. On the upside, the bulls may potentially challenge the downtrend line (as drawn in the chart). Maintain our positive trading bias.

On the expectation that the bulls are still able to stage a relatively stronger rebound, we continue to recommend that traders 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 the 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 - 26 Jun 2019