Maintain short positions as the rebound is still within expectations. The FCPO extended its rebound for a second consecutive session last Thursday. It reached a high of MYR2,695 before closing at MYR2,677 – indicating a gain of MYR32.00. As highlighted in our 28 Jul’s note, the commodity is expected to stage a counter-trend rebound following its sharp retracement, which lasted over two sessions. Once this rebound is completed, we believe the commodity will likely to extend its correction phase. We maintain our negative trading bias.

We advise traders to stick to 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 MYR2,635 – the price point of the latest session, followed by MYR2,600. Towards the upside, the immediate resistance is set at MYR2,700, followed by MYR2,740 – the price point of 27 Jul.

Source: RHB Securities Research - 3 Aug 2020