Initiate short positions as the 200-day SMA line failed to hold. The FCPO closed on a softer note yesterday, settling MYR119 lower at MYR2,332 – after it managed to narrow losses from a low of MYR2,190. The weak session again placed the commodity below the 200-day SMA line. Despite the sharp rebound from the intraday low, the closing level below the said SMA line marked the end of the commodity’s rebound over the past week. Premised on this, we switch our trading bias to negative.

Our previous long positions – initiated at MYR2,495, the closing level of 4 Mar – were closed out in the latest session at a loss. On the bias that the bearish bias is resuming, we initiate short positions at the latest closing level. For risk management purposes, a stop-loss can be placed above MYR2,494

The immediate support is revised to MYR2,249, followed by MYR2,190 – both are derived from the latest candle. Moving up, immediate resistance is now pegged at MYR2,457, followed by MYR2,494 – which are the price points of 6 Mar.

Source: RHB Securities Research - 10 Mar 2020