Maintain short positions as retracement may still be extending. The FCPO staged a positive intraday price reversal to settle MYR4.00 higher, at MYR2,250 – this was after it tested the immediate support of MRY2,222 with a low of MYR2,217. Despite the positive close, there was insufficient evidence to suggest that the retracement leg that resumed post-9 Apr’s “Bearish Engulfing” formation has ended. Towards the downside, the commodity may likely test the MYR2,186 support level – as part of the possible sideways trading pattern that has been in progress since early March. Hence, we are keeping our negative trading bias.

As the risk is still tilting towards the downside, we recommend that traders stick to short positions, We initiated these at MYR2,246, the close of 13 Apr. For risk management purposes, a stop-loss can be placed above MYR2,265.

Immediate support is set at MYR2,222, the low of 6 Apr. This is followed by MYR2,186, the low of 17 Mar. Conversely, the immediate resistance is set at MYR2,335, the high of 10 Apr. Breaking this may seem market test MYR2,409 – the price point of 9 Apr.

Source: RHB Securities Research - 15 Apr 2020