Maintain short positions. The FCPO closed MYR26 lower yesterday, at MYR1,994. The negative session came after the commodity came close to testing the MYR2,025 resistance mark in the prior session, indicating that the bears are still in control over the negative price trend – despite the bulls’ attempt to stage a rebound in the prior session. The negative price trend resumed in March, following a downside breach from the 200-day SMA line. This is further supported by the 100-day SMA line which is curving downward, while the 200-day SMA line is also showing signs of plateauing. We make no change to our negative trading bias.

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 MYR2,005.

The immediate support is revised to MYR1,965 – the latest low. This is followed by MYR1,939, the low of 6 May. Meanwhile, the immediate resistance is set at MYR2,025 – derived from 4 May’s candle. This is followed by MYR2,095 – the high of 30 Apr.

Source: RHB Securities Research - 13 May 2020