Maintain short positions. The FCPO formed a white candle, and at the closing, settled slightly above the 50-day SMA line (current reading: MYR2,002). The session’s low and high were posted at MYR1,978 and MYR2,008, before ceding at MYR2,004, indicating a gain of MYR21. Price actions around the said SMA in the coming sessions would be critical. A firm upside breach of the immediate resistance of MYR2,015 may suggest a valid recapturing of the said SMA, and hence, chances are higher for the commodity to extend its rebound. Recall that the commodity has been struggling to overcome the said SMA YTD. For now, we keep to our negative trading bias.

Until the bulls able to indicate that a stronger rebound is in the making, we continue to recommend traders stay in short positions. These were initiated at MYR1,951, the closing level of 28 Jun. For risk management purposes, a stop-loss can be placed at above MYR2,015.

The immediate support is set at the MYR1,900 threshold. This is followed by MYR1,863, the low of 25 Aug 2015. Meanwhile, the immediate resistance is set at 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 - 24 Jul 2019