Maintain short positions as the bulls are still absent. Despite trading within a solid range MYR2,040-2,114 yesterday, the FCPO closed just MYR11 higher at MYR2,075. The latest session did not signal that the commodity is ready to stage a strong rebound. The gain is deemed as the bears taking a small pause, after the sharp decline in the prior session. The commodity’s downtrend, which resumed after it breached below the 200-day SMA line in March, is still firmly in place – this is supported by the RSI reading, which remains capped by the resistance line (as drawn on the chart). We maintain our negative trading bias.

With no signal to mark an end to the retracement phase, we recommend that investors stick to short positions, We initiated these at MYR2,246, the close of 13 Apr. To manage risks, a stop-loss can now be placed at the breakeven mark.

The immediate support is maintained at MYR2,000, followed by MYR1,916 – the low of 10 Jul 2019. Meanwhile, resistance points are pegged at MYR2,100, followed by MYR2,200.

Source: RHB Securities Research - 23 Apr 2020