Maintain short positions. The FCPO came in near to test the multi-year high of MYR3,470 with the session’s high of MYR3,468, before giving up some of the gains to settle up MYR46 at MYR3,456. While the positive performance defies our expectation for the commodity to resume its correction phase, it has yet to be able to signal the conclusion of its correction phase that started from the MYR3,470 resistance point. This means the risk for the commodity to decline in the coming sessions is still high. This correction phase is triggered following the commodity’s sharp multi-month price run up. Towards the downside, we are still keeping our bias for the commodity to retest the MYR2,150 to MYR2,200 price zone. 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 the round figure of MYR3,400, followed by MYR3,340 – the low of 9 Dec. Towards the upside, the immediate resistance is now set at MYR3,470, followed by MYR3,500.

Source: RHB Securities Research - 21 Dec 2020