Maintain short positions. The FCPO underwent a follow-through on last Thursday’s sharp positive intraday price reversal from the MYR3,340-3,000 support zone. It closed MYR66.00 stronger, at MYR3,444 – not too far from the intraday high of MYR3,448. The latest two sessions’ sharp positive performance came as a surprise. We had been expecting the commodity to extend its decline following (what we regarded as) a confirmation of a “Double Top” formation during the early part of the week. Nevertheless, as long the commodity is still capped by the MYR3,470 resistance, it would still be deemed as trading in a correction phase. A 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 support levels are revised to MYR3,415 and MYR3,375. On the upside, the immediate resistance is revised to MYR3,470, followed by the MYR3,500 round figure.

Source: RHB Securities Research - 28 Dec 2020