Maintain short positions as there is still no clear reversal signal. The FCPO added MYR22 to close at MYR2,649. This was after it reached a low and high of MYR2,623 and MYR2,666. While the commodity has been developing a minor rebound over the latest two sessions, after the 100-day SMA line was retested recently, there is still no clear price signal to indicate that a stronger rebound or total price reversal is developing. As such, we stick to our negative trading bias.

As the risk is still tilted towards the downside, 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.

We are keeping the immediate support target at MYR2,575, the low of 28 Jan. This is followed by MYR2,500. Conversely, the immediate resistance is expected to emerge at MYR2,655, followed by MYR2,700.

Source: RHB Securities Research - 18 Feb 2020