Maintain short positions. The FCPO underwent a negative intraday price reversal. After hitting a high of MYR2,394, the soft commodity nosedived to reach a low of MYR2,335, before rebounding to settle MYR4.00 lower at MYR2,358. The closing level continued to place the commodity below the MYR2,370 immediate resistance – suggesting that (based on the daily chart) the possibility of a deeper rebound developing is still capped. As such, we make no change to our negative trading bias

In the absence of a confirmation that a deeper rebound is in effect, we recommend that traders remain 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 MYR2,370.

The immediate support is revised to MYR2,335 – the latest low. This is followed by MYR2,293 – the low of 30 Jun. Conversely, the immediate resistance is set at MYR2,370, slightly above 30 Jun’s high. This is followed by MYR2,400.

Source: RHB Securities Research - 13 Jul 2020