Maintain short positions as the 200-day SMA line failed to hold. After bouncing around the 200-day SMA line over the prior two sessions, the bears resumed their downward pressure on the FCPO. At the closing, the commodity fell MYR140.00 to settle at MYR2,319 – a valid downside breach from the said SMA line. The said breakdown is a negative signal and indicates that the retracement which started from the high of MYR3,150 on 9 Jan is still firmly in place – even though the RSI reading has again entered the oversold region. Premised on this, we are maintaining our negative trading bias.

Traders are advised to remain in short positions. We initiated these at MYR2,695.00, the closing level of 11 Feb. To manage risks, a stop-loss can be placed above MYR2,533.00.

The immediate support is pegged at MYR2,263 the low of 22 Oct 2019, followed by MYR2,236, the low of 16 Oct 2019. Towards the upside, the immediate resistance is now expected at MYR2,380.00, followed by MYR2,430.00 – both are derived from the latest candle.

Source: RHB Securities Research - 2 Mar 2020