Maintain short positions. The FCPO failed to cross the resistance level despite recording a strong performance in the early session. The commodity opened at MYR3,070, with strong interest. It rose to the day’s high of MYR3,136, but – as the resistance proved too strong – it retraced MYR37.00 to settle at MYR3,097. The RSI remains above the 50% threshold, indicating that the bulls are still in control. That said, we do not discount the possibility that the FCPO may stage another attempt to cross the resistance in the near term. Although it did breach the resistance level during the intra-day, investor sentiment prevented a convincing close – so it was a risk-off trade at the final hour of the session. As such, we deem the resistance intact and make no change to our negative trading bias.

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.

The immediate support is revised to MYR3,000, followed by MYR2,950. Moving up, the immediate resistance is now at MYR3,123 – the high of 30 Oct, followed by MYR3,150, the high of 10 Jan.

Source: RHB Securities Research - 10 Nov 2020