Maintain short positions. The FCPO’s efforts to crack the multi-year high of MYR3,470 remain unsuccessful. After hovering around the session’s high of MYR3,465 towards the end of the first half of the trading day, the commodity gapped down when the second half opened. This pushed the price to a low of MYR3,370 where the FCPO tested the immediate support of MYR3,375, before it rebounded to close at MYR3,412 – indicating a gain of MYR6.00. The commodity has been feeling the brunt of adverse price reactions from the multi-year high in recent weeks. Provided that it remains limited by this resistance, the risk of it extending the correction would still be high. As such, we maintain a 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 level is pegged at MYR3,375 and followed by MYR3,324 – the low of 17 Dec. Conversely, the immediate resistance is maintained at MYR3,440, followed by MYR3,470.

Source: RHB Securities Research - 23 Dec 2020