Maintain short positions until the bulls show stronger control. The FCPO’s minor rebound is extending into the latest trade. At the closing, the commodity added MYR11 to settle at MYR2,160 – the low and high were posted at MYR2,149 and MYR2,166. For now, we continue to regard the commodity’s price actions – after it tested the 200-day SMA line on 30 Sep – as just a minor rebound, after it experienced a retracement between 17 Sep and 30 Sep. Towards the upside, a stronger rebound may develop should the FCPO manage to breach above the MYR2,173 mark. We maintain our negative trading bias.

Pending further positive price signals from the bulls, we continue to recommend traders remain in short positions. These were initiated at MYR2,245, or the closing level of 19 Sep. To manage risks, a stop-loss can now be placed above MYR2,173 – the high of 26 Sep. We are keeping the immediate support target at MYR2,100, which is near the 200-day SMA line. This is followed by MYR2,000, a round figure. Conversely, the immediate resistance is set at MYR2,173, or the high of 26 Sep. This is followed by MYR2,312, which was the high of 26 Aug.

Source: RHB Securities Research - 8 Oct 2019