Maintain short positions until the trailing-stop is crossed. The FCPO extended its rebound yesterday, after testing the 200-day SMA line in the prior session. At one point, the soft commodity tested the immediate resistance of MYR2,173 with an intraday high of MYR2,176, before closing MYR32 higher at MYR2,167. While the positive price reactions from the said SMA in the latest two sessions have been relatively strong, until the said immediate resistance is crossed at the closing, the commodity’s correction phase which resumed on 7 Sep on the failed attempt to cross the MYR2,300 level would still be deemed intact. We keep to our negative trading bias.

Until there is confirmation that the correction phase has reached an end, we continue to recommend that traders stay in short positions. These were initiated at MYR2,245, the closing level of 19 Sep. To manage risks, a stop-loss can now be placed at above MYR2,173, the high of 26 Sep.

Towards the downside, immediate support is expected at MYR2,100, near the 200-day SMA line. This is followed by MYR2,000, a round figure. On the other hand, the immediate resistance is now expected at MYR2,173, the high of 26 Sep. This is followed by MYR2,312, the high of 26 Aug.

Source: RHB Securities Research - 2 Oct 2019