Selling continued to dominate as the commodity broke below RM2,900 resistance level. Although the commodity was marginally higher, another black candle formed yesterday underscoring the weakness. It was moving in line with the downtrend since late March, with the latest lower highs at RM3,193 and RM3,182. The commodity remained below the declining 50-day MAV line and the 200-day MAV line, reinforced by the longer-term negative indication of the 'Death Cross' that emerged in early July.

Thus, the firm downside bias should persist, with a close back above RM2,900 unlikely should the downside bias stay strong. Minor support is expected at yesterday's low of RM2,850. This is followed by Oct 2011's covered gap of RM2,820 and at the psychological RM2,800. Stronger support is seen at Oct 2011's low of RM2,750. Again, the broken support of RM2,900 has turned into a resistance. Although chances are low, a close back above RM2,900 signals a turnaround in sentiment and possibly a return of buying. Any buying needs a confirmation by way of a close above RM2,950. Resistance remains at 1 Aug's morning low of RM2,975 as well as RM3,000. This is followed by the broken supports of RM3,050 and RM3,100 ' the 76% retracement of the late May-early June decline and 38% of the April-June decline, respectively. Minor resistance is also expected at RM3,030 and RM3,070.

Source: OSK