Downside bias still dominates as the commodity closed lower, staying below the important RM2,900 resistance level. It is moving in line with the downtrend since late March, with the latest lower highs at RM3,193 and RM3,182. The commodity remains 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. Nevertheless, the hint of an upward bias that emerged last Friday remains intact following another failed test of the RM2,850 support level yesterday, making three consecutive candles with relatively 'Long Lower Shadow Lines', the latest being a positive 'Butterfly Doji'.

Thus, the firm downside bias should persist and again, a close below the RM2,850 support level is necessary to keep it intact. Supports are at Oct 2011's covered gap of RM2,820 and the psychological RM2,800. Stronger support is seen at Oct 2011's low of RM2,750. However, a failure to close below RM2,850 could see a return in buying following three false breakdowns. Resistance remains at the broken support of RM2,900, with a minor one at yesterday's high of RM2,860. A close back above RM2,900 signals a turnaround in sentiment, confirming the latest three candles' upward bias. Resistance remains at RM2,950, 1 Aug's morning low of RM2,975, as well as the psychological 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 resistances are also expected at RM3,030 and RM3,070.

Source: OSK