Risks of 100-day SMA line breaking down still high; maintain short positions. The FCPO settled the latest session MYR35 higher, at MYR2,660. This was after it reached a low of MYR2,601. Despite the positive performance, prices remain relatively close to the 100-day SMA line – which has been under pressure by the bears. Until there are signs pointing to a reversal from the said SMA line, chances are still very high that the FPCO would retrace further. As such, we are keeping to our negative trading bias.

In the absence of a clear rebound from the said SMA line, we recommend that traders remain in short positions. We initiated these at MYR2,695, the closing level of 11 Feb. To manage risks, a stop-loss can be placed at the breakeven level.

The immediate support is set to emerge at 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 the MYR2,700 round figure. This is followed by MYR2,780, derived from 10 Feb’s candle.

Source: RHB Securities Research - 17 Feb 2020