Maintain short positions. After nearing to test the multi-year high of MYR3,470 halfway through the session, the FCPO experienced a relatively sharp negative price reversal to close MYR38 weaker at MYR3,406 – a tick above the session’s low. The closing level also meant that the previous immediate support has been breached. Recall that including this latest session, the commodity has reacted negatively three times from around the MYR3,470 level – a significant indication in defining the next price directional bias. As long as it is still capped by this level, the risk for the commodity to experience an extended correction phase would remain high. Our base case is for prices to retrace towards the MYR3,150-3,200 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 support levels are revised to MYR3,375 and MYR3,324 – the low of 17 Dec. Meanwhile, the immediate resistance is revised to MYR3,440, followed by MYR3,470.

Source: RHB Securities Research - 28 Dec 2020