Maintain short positions. The FCPO generally trended higher for the entire session, reaching a high of MYR3,423, before paring gain to end MYR45 stronger at MYR3,403. The positive session was in line with our expectation for it to develop a minor pause following the previous three sessions’ declines. This came after the appearance of the indecisive “Doji” formation in the previous session. We see this rebound as counter-trend in nature and it is expected to be completed in the coming session. The commodity’s next bigger move is still tilted towards the downside with the minimum retracement target of between MYR3,150 to MYR3,200. Maintain our negative trading bias.

We recommend that traders 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 revised to MYR3,340 – the low of 9 Dec, followed by MYR3,275. Towards the upside, the immediate resistance is set at MYR3,425, followed by MYR3,470 .

Source: RHB Securities Research - 16 Dec 2020