Maintain short positions. The FCPO tested the support zone of MYR2,970-2,940 with a low of MYR2,935 yesterday, before rebounding to narrow losses at MYR32.00 – it closed at MYR2,979. Consequently, a “Hammer” formation appeared – indicating a possibility that bulls are attempting to regain control over the commodity’s price trend following the decline recorded over recent sessions. However, further positive price actions are needed in the coming days to confirm this. Until this happens, our expectation for the commodity to develop a correction phase remains unchanged. As such, our negative trading bias is also still in effect.

We recommend that traders stick to short positions. We initiated these at MYR3,011, the closing level of 30 Oct. To manage risks, a stop-loss can be placed above MYR3,123.

We are maintaining the immediate support at MYR2,970, followed by MYR2,940. Moving up, the immediate resistance is revised to MYR3,000, followed by MYR3,060

Source: RHB Securities Research - 3 Nov 2020