Maintain short positions. The FCPO saw a strong rebound yesterday, jumping MYR55.00 to settle at MYR3,747. The commodity gapped down to open at MYR3,601. After briefly touching the day’s low of MYR3,594, it gradually shaved down losses and rebounded to the day’s high of MYR3,756, before closing – thereby forming a Bullish Engulfing pattern. Buyers overpowered the bears to push the commodity above the 50-day SMA line. Although the RSI is pointing downwards, the latest price action suggests that we may see a follow-though of bullish momentum retesting the psychological level of MYR3,800. Breaching above the level may see a resumption of the uptrend. On the other hand, failure to sustain above MYR3,650 may see buying interest waning. As long as the stop-loss remains intact, we will maintain a negative trading bias.

We recommend that traders remain in short positions, initiated at MYR3,692 or closing level of 26 Mar. To manage risks, a stop-loss is set at 25 Mar’s low of MYR3,826.

The immediate support remains at MYR3,650, followed by 23 Feb’s low of MYR3,576. Towards the upside, the immediate resistance level is pegged at MYR3,800, followed by 25 Mar’s closing price of MYR3,863.

Source: RHB Securities Research - 30 Mar 2021