Maintain short positions. The FCPO formed a white candle in the latest session. At the closing, the commodity added MYR14 to settle at MYR1,958. The session’s low and high were recorded at MYR1,938 and MYR1,965. We still hold the view that the commodity’s weak bias that started from the high of MYR2,344 on 7 Feb is still not showing clear signs of reaching an end. This is despite the fact that its past two weeks’ downward movements are showing signs of receding momentum – which is typically associated with the bottom building process. Based on this, we keep to our negative trading bias.

Until the bulls manage to show signs of control over the price trend, we continue to recommend that traders stay in short positions. These were initiated at MYR1,951, the closing level of 28 Jun. A stop-loss can now be placed above MYR1,987, the high of 27 Jun.

We are keeping the immediate support at the MYR1,900 threshold. This is followed by MYR1,863, the low of 25 Aug 2015. Meanwhile, the immediate resistance is set at MYR1,987, the high of 27 Jun. If this is overcome, the commodity may test MYR2,059 threshold, the high of 18 Jun.

Source: RHB Securities Research - 16 Jul 2019