Maintain short positions as the bears are testing the 100-day SMA line again. The FCPO performed weakly in the latest session and its 100-day SMA line remains under pressure to be breached. The intraday tone was negative as the commodity generally trended lower – the high and low were recorded at MYR2,709 and MYR2,619, before closing MYR84 lower at MYR2,625. The previous immediate support levels were also breached. As the retracement is still progressing, which could be further enhanced should the said SMA line be breached, we are keeping our negative trading bias.

As the risk for further retracement has increased, we recommend that traders remain in short positions. We initiated these at MYR2,695, the closing level of 11 Feb. For risk management purposes, a stop-loss can be placed above MYR2,780.

The immediate support is revised to MYR2,575, the low of 28 Jan. This is followed by the MYR2,500 round figure. Towards the upside, the immediate resistance is now pegged at MYR2,655, followed by the MYR2,700 round figure.

Source: RHB Securities Research - 14 Feb 2020