Maintain short positions. The FCPO underwent a positive intraday price reversal. After hitting a low of MYR2,606 – which is near the MYR2,600 support level – the commodity rebounded rather strongly to close at MYR2,688, reflecting a gain of MYR45.00. Despite the positive performance from near the support level, this is likely a counter-trend rebound, following the recent sessions’ sharp retracement. Chances are high that the commodity is still in the process of correcting its prior multi-week uptrend – meaning that the downside potential is still not exhausted. Hence, we are maintaining a negative trading bias. .

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

The immediate support is revised to MYR2,645, a price point of the latest session. This is followed by MYR2,600. Towards the upside, the immediate resistance is now set at MYR2,700, followed by MYR2,750.

Source: RHB Securities Research - 13 Aug 2020