Maintain short positions while revising the stop-loss to >MYR2,015. The FCPO shed MYR7 to close at MYR1,981 yesterday. The session’s low and high were at MYR1,973 and MYR1,989. While the commodity’s weak price trend over the past two weeks or so came on the back of weakening momentum, there is no conclusive price evidence at this juncture to suggest an interim low has been established. Based on the recent weeks’ price movements, we have redrawn the commodity’s downtrend line (shown in the chart). While the commodity settled above the said downtrend line in the latest session, further positive price actions ie upside breach of the 50-day SMA line are needed to confirm that an interim low has been set. Until this happens, we maintain our negative trading bias.

Until the bulls show firmer 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. We revised the stop-loss to above MYR2,015.

Towards the downside, immediate support is set at the MYR1,900 threshold. This is followed by MYR1,863, the low of 25 Aug 2015. Moving up, the immediate resistance is revised to MYR2,015, near the high of 24 Jun. This is followed by the MYR2,059 threshold, the high of 18 Jun.

Source: RHB Securities Research - 17 Jul 2019