Maintain long positions to ride on the possible stronger counter-trend rebound. The seed oil failed to retain its earlier session’s positive tone. It ended slightly lower by MYR1 at MYR2,022, after it reached a high of MYR2,040. At this juncture, we still believe the FCPO is developing a counter-trend rebound. This is to correct its prior multi-week’s retracement leg. Towards the upside, there is a fair chance of this rebound testing the downtrend line, which is near the immediate resistance of MYR2,124. We maintain our positive trading bias.

On the expectation that the rebound phase has not completed yet, we continue to recommend traders to 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 - 24 Jun 2019