Maintain short positions as the trend is still negative. The FCPO experienced an intraday reversal in the latest session after it briefly tested the immediate support of MYR1,940. The low was recorded at MYR1,938, before it ended at MYR1,967, indicating a gain of MYR9. The intraday reversal from the said immediate support can be seen as an initial attempt by the bulls to reverse the commodity’s weakening trend. However, further positive price actions are needed in the coming sessions to confirm the possibility of a deeper rebound developing. Pending this, we keep to our negative trading bias.

As the weak price trend is still firmly intact for now, and until there are signs for a deeper rebound developing, we continue to recommend that traders stay in short positions – initiated at MYR1,951, which was the closing level of 28 Jun. A stoploss can be placed above MYR2,059.

Towards the downside, the immediate support is expected 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 pegged at MYR2,000, the next round figure. This is followed by MYR2,059, the high of 18 Jun.

Source: RHB Securities Research - 3 Jul 2019