Maintain short positions until a clearer rebound signal emerges. The FCPO experienced a relatively narrow trading range of between MYR2,023 and MYR2,049 – before ending MYR11 higher at MYR2,031. While the positive session can be seen as a follow-up from the prior session’s positive intraday price reversal – after the MYR2,000 support level was briefly tested – it is not sufficient to signal the multi-month downtrend has reached an end and is ready for a rebound. Based on the daily chart, the negative bias would stay as long as prices are still capped below MYR2,125.

As the latest rebound is still considered too mild to signal a change in trend or for a strong rebound to kick in, 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 set at MYR2,000, followed by MYR1,916 – the low of 10 July 2019. On the other hand, 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 - 30 Apr 2020