Maintain long positions as the MYR1,960 level is still holding up. The FCPO failed to retain its earlier session’s gains. At the closing it settled MYR3 weaker at MYR1,963, after it reached a high of MYR1,987. Still, we believe there is a decent chance that the soft commodity will stage a counter-trend rebound. This rebound phase is meant to correct the commodity’s prior multi-week retracement phase. If the MYR1,960 mark (stop-loss for our ongoing long positions) is not breached at the closing, this rebound phase may still be able to test the downtrend line (as drawn in the chart). As such, we stick to our positive trading bias.

As the bulls are still able to hold the commodity above the MYR1,960 mark, we continue to recommend that traders stay in long positions. These were initiated at MYR2,034, the closing level of 17 Jun. To manage risks, a stop-loss can be placed below MYR1,960, the low of 13 May.

Immediate support is set at MYR1,940, the low of 27 Nov 2018. Breaking this may see the market test 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 - 28 Jun 2019