No confirmation of a positive price reversal; maintain short positions. Yesterday, the FCPO tested the immediate resistance with a high of MYR2,825, before giving back part of the gains to settle at MYR2,789 – indicating a gain of MYR75.00. The positive performance indicates that the commodity’s retracement phase may be losing losing momentum – albeit an early sign – as it failed to stage a negative price follow-through after breaking below the MYR2,725 mark the day before. Based on the daily chart, to confirm a stronger rebound is in the making, the MYR2,825 level has to be breached at the closing. For now, we make no change to our negative trading bias.

We recommend that traders stick to short positions. We initiated these at MYR3,007, the closing level of 21 Sep. To manage risks, a stop-loss can be placed above MYR2,825.

The immediate support is revised to MYR2,755, followed by MYR2,700. On the flip side, the immediate resistance is now at MYR2,800, followed by MYR2,825.

Source: RHB Securities Research - 2 Oct 2020