Maintain short positions while putting a trailing-stop at breakeven. The FCPO staged a positive intraday price reversal to end MYR31 higher at MYR2,235. This came after it tested the immediate support of MYR2,186 with a low of MYR2,181. While the latest performance is in line with our expectations that the commodity has likely been trading in a sideways pattern since early March, further positive price actions in the coming sessions are needed to confirm that the next leg of rebound is developing. Until this happens, the current retracement that resumed subsequent from the 9 Apr’s “Bearish Engulfing” formation is deemed to still be in place. Maintain our negative trading bias.

Until reversal signals appear, 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 now be placed at the breakeven level.

The immediate support is maintained at MYR2,186, the low of 17 Mar. This is followed by MYR2,150. Moving up, the immediate resistance is now pegged at MYR2,303, the high of 15 Apr, followed by 2,409 – the high of 9 Apr’s “ Bearish Engulfing” formation.

Source: RHB Securities Research - 20 Apr 2020