Fake breakout from 200-day SMA line is confirmed; initiate short positions. The FCPO ended the latest session weaker by MYR63 at MYR2,339. The low and high were posted MYR2,323 and MYR2,420. The session’s high suggests the bulls, during the intraday, attempted to push prices back above the 200-day SMA line – but failed. This is a negative price signal, indicating a possible price rejection from the said SMA line – this was after the commodity briefly stayed above this SMA line two session ago. Premised on this, we now switch our trading bias to negative.

Our previous long positions were opened at MYR2,353, which was the closing level of 24 Mar that closed out at the breakeven in the latest session. On the bias that a price reversal has occurred, we initiate short positions at the latest closing. To manage risks, a stop-loss can be placed above MYR2,466.

The immediate support is revised to MYR2,300 round figure, followed by MYR2,250. On the other hand, the immediate resistance is now set at MYR2,400 round figure, followed by MYR2,466, the high of 30 Mar.

Source: RHB Securities Research - 2 Apr 2020