Maintain short positions. The FCPO extended its deep retracement into the latest session, ending MYR94 weaker to close at MYR2,776, thus marginally breaching below the 50-day SMA line. While the retracement has reached our minimum target of retesting the abovementioned SMA line, intraday, there was no sign of any positive price actions around the said SMA line to point towards a potential positive price reversal. This means the risk for the commodity to develop a much deeper correction phase is picking up. Hence, we are keeping our negative trading bias.

We recommend traders to stay in short positions. We initiated these at MYR2,870, which is the closing level of 16 Oct. To manage risks, a stop-loss can be placed above MYR3,000.

We revise the support level to MYR2,747 – the high of 5 Oct, and the round figure of MYR2,700. Moving up, the immediate resistance is set at MYR2,820, followed by MYR2,870.

Source: RHB Securities Research - 20 Oct 2020