Maintain short positions despite the intraday positive price reversal. The FCPO staged a positive intraday price reversal to settle MYR2 higher at MYR2,020. This was after it briefly tested the MYR2,000 support level with a low of MYR1,988. Despite the positive price reversal, it was still insufficient to indicate that the commodity’s retracement leg has been completed and is due for a rebound. Broadly, the multi-month downtrend, which has been extending after the 200-day SMA line was breached in March, is still firmly in place. For now, this bias would stay as long as prices are still capped below MYR2,125.

In the absence for a price signal to suggest a rebound is taking place, 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 above MYRY2,125.

The immediate support is maintained at MYR2,000, followed by MYR1,916 – the low of 10 July 2019. Towards the upside, immediate resistance is set at MYR2,085 – derived from 24 Apr’s candle. This is followed by MYR2,125, the high of 23 Apr.

Source: RHB Securities Research - 29 Apr 2020