Maintain short positions. The FCPO closed MYR30.00 weaker at MYR2,686 last Friday, falling below the previous MYR2,700 support level. The negative session was a follow-through from the prior session’s sharp intraday retracement, and suggests that the commodity may likely be resuming its retracement leg. The ongoing correction phase came after the commodity’s previous sharp multi-week uptrend. Towards the downside, an extension of this correction could see the 200-day SMA line being re-tested. We maintain 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 MYR2,750.

Support levels are at MYR2,660 and MYR2,630 – both being derived from 12 Aug’s candle. Moving up, resistance points are pegged at MYR2,710, followed by MYR2,750.

Source: RHB Securities Research - 24 Aug 2020