Maintain short positions. The FCPO extended its negative performance for a second consecutive day. The intraday tone was negative, as it generally trended lower for the entire session. The high and low was posted at MYR2,666 and MYR2,562, before the commodity closed MYR69.00 weaker, at MYR2,603. Consequently, the MYR2,627 support was breached. Given the sharp retracement over the latest two sessions, we do expect some form of rebound to likely develop over the next 1-2 sessions. However, this movement would likely be counter-trend in nature. As such, we are keeping our negative trading bias.

We advise traders to stay in short positions. We initiated these at MYR2,672 – the closing level of 27 Jul. To manage risks, a stop-loss can now be set above MYR2,790.

The immediate support is revised to MYR2,564, the low of 17 Jul, followed by MYR2,530. Meanwhile, the immediate resistance is now at MYR2,627 – the low of 21 Jul, followed by MYR2,650, the price point of the latest session.

Source: RHB Securities Research - 29 Jul 2020