Maintain long positions to play the rebound. The FCPO closed marginally lower by MYR1.00 at MYR2,031 yesterday – after it hit a low and high of MYR2,005 and MYR2,044. We still believe that a counter-trend rebound is developing – this came after the multi-week retracement reached an interim low of MYR1,939 on 6 May. The case for the rebound is also supported by the RSI reading, which is picking up and crossed above the resistance line in the prior session. In the absence of adverse price actions that would indicate the rebound has reached its top, we are maintaining our positive trading bias.

We advise traders to stay in long positions. We initiated these positions at MYR2,032, the closing level of 13 May. To manage risks, a stop-loss can be placed below MYR1,980.

The immediate support is maintained at MYR1,980 – derived from 13 May’s candle. This is followed by MYR1,939, the low of 6 May. Moving up, the immediate resistance is at MYR2,095 – the high of 30 Apr, followed by MYR2,125 – the high of 23 Apr.

Source: RHB Securities Research - 20 May 2020