Signs of minor bounce taking place; maintain short positions. The FCPO ceased the latest session higher by MYR44 at MYR2,119, after it ranged between MYR2,065 and MYR2,125. While the commodity managed to end the latest two sessions on a positive note, we believe this is merely a relief rebound after the 21 Apr’s sharp decline. This means the multi-month downtrend, which resumed after the commodity breached below the 200-day SMA line in March, is still firmly in place. The negative bias is also supported by the RSI reading, which continued to slide lower and below the resistance line (as drawn in the chart). Hence, we are keeping our negative trading bias.

Until a clearer price reversal signal emerges, 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 revised to MYR2,065, the latest low. This is followed by MYR2,000 round figure. Moving up, the resistance points are pegged at MYR2,200 round figure, followed by MYR2,273 – the high of 20 Apr.

Source: RHB Securities Research - 24 Apr 2020