Maintain short positions. The FCPO’s latest performance can be regarded as indecisive, with the appearance of the “Doji” formation. The trading range was also relatively narrow, ie between MYR3,340 to MYR3,388 – before the commodity closed marginally weaker by MYR8.00, at MYR3,358. We regard the latest performance as an early indication that the commodity’s last three declines may be taking a minor pause in the next 1-2 sessions. Still, based on the daily chart, we believe the next bigger move is likely tilted towards the downside, as we believe the commodity is due for a correction following its multi-month sharp upward move. We are expecting prices to retrace towards the MYR3,150-3,200 area, at the minimum. We maintain a negative trading bias.

We recommend that traders to stay in short positions, initiated at MYR3,366 – the closing level of 8 Dec. To manage risks, a stop-loss can be placed above MYR3,470.

The immediate support is maintained at MYR3,325, followed by MYR3,275. Conversely, the immediate resistance is pegged at MYR3,425, followed by MYR3,470 .

Source: RHB Securities Research - 15 Dec 2020