Maintain short positions. The FCPO gave back most of its intraday gains to settle MYR7 higher at MYR2,410, after sliding from the session’s high of MYR3,456. The relatively sharp retracement from the session’s high is lending support to our bias that the commodity’s two sessions of counter-trend rebound have likely completed during Friday’s session. In a bigger picture, this implies the retracement that started from the high of MYR3,470 recorded on 7 Dec is likely to resume next week. Towards the downside, the minimum retracement target is maintained in the region of 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 maintained at 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 - 21 Dec 2020