Initiate short positions as the retracement phase is taking place. The FCPO closed MYR40.00 lower at MYR3,011 last Friday, after failing to sustain its earlier session’s positive tone where the commodity hit a high of MYR3,115. The negative performance is a continuation of the prior session’s price rejection from the MYR3,104 and MYR3,150 resistance zone. This implies that the commodity is likely developing a retracement phase. Towards the downside, we are expect prices to retrace towards the support line (as drawn in the chart). We switch our trading bias from positive to negative.

Our previous long positions – initiated at MYR2,888, the closing level of 21 Oct – were closed out at MYR3,015 in the latest session. Concurrently, we initiate short positions. To manage risks, a stop-loss can now be placed above MYR3,123.

The immediate support is revised to MYR2,970, followed by MYR2,940. Moving up, the immediate resistance is now set at MYR3,060, followed by MYR3,123.

Source: RHB Securities Research - 9 Nov 2020