Maintain short positions. The FCPO saw the resurgence of selling pressure, plunging MYR138.00 to settle at MYR3,799 yesterday The commodity gapped down by MYR49.00 at the opening, at MYR3,888, and barely touched the day’s high of MYR3,911. The bears were aggressive from the opening onwards, and continued to drag the commodity downwards through the entire session, to hit the day’s low of MYR3,789. Since it has breached the previous support level of MYR3,827 (forming a “lower low”), the negative momentum will likely follow through in the coming sessions, to test the lower support levels of MYR3,750 and MYR3,700. Failure to find an interim support near MYR3,700 would lead to a deeper correction towards the 50-day SMA line. Since the commodity is undergoing a correction phase and presents limited upside risks, we make no change to our negative trading bias.

We recommend that traders to maintain short positions, which were initiated at MYR3,897 or the closing level of 16 Mar. To manage risks, we revised the stop-loss to MYR3,954.

The nearest support is at MYR3,750, followed by MYR3,700. Towards the upside, the immediate resistance is pegged to 16 Mar’s low of MYR3,891, followed by 8 Mar’s high of MYR3,954.

Source: RHB Securities Research - 19 Mar 2021