Maintain short positions. The FCPO almost completely closed the prior session’s “Downside Gap” with a high of MYR2,430, before it slid to settle MYR27.00 lower at MYR2,368 – marginally crossing the previous immediate support of MYR2,371. The negative intraday price reversal indicates that the bears are still in firm control. Following the price rejection from the 200-day SMA line in the previous session, chances are high that the soft commodity is in the process of correcting its prior multi-week uptrend. Hence, we are keeping our negative trading bias.

We recommend traders to stay in short positions. We initiated these at MYR2,395, the closing level of 25 Jun. To manage risks, a stop-loss can be placed above MYR2,475.

The immediate support is revised to MYR2,337, derived from the low of 17 Jun. This is followed by MYR2,294, the low of 15 Jun. Moving up, the immediate resistance set at MYR2,400 – followed by MYR2,435, the low of 24 Jun.

Source: RHB Securities Research - 29 Jun 2020