Maintain short positions. The FCPO moved sideways and closed just MYR4.00 lower from its previous session to settle at MYR3,737. Last Friday, the commodity began mildly lower, at MYR3,711, then rapidly dropped to the day’s low of MYR3,674 before climbed to the day’s high of MYR3,780 prior to settling at MYR3,737 – indicating that it has yet to form a “higher high” bullish pattern. Meanwhile, the RSI indicator is still capped by the downtrend line, which implies that the recent bullish momentum is still weak. Unless the FCPO moves upwards and breaches the psychological level of MYR3,800 to form a “higher high”, we remain cautious on the downside risk. We would also tend to expect the rebound momentum to be short-lived. As such, we will maintain a negative trading bias.

We recommend that traders maintain short positions, which were initiated at MYR3,692 or the closing level of 26 Mar. To manage risks, a stop-loss is placed at 25 Mar’s low of MYR3,826.

The immediate support remains unchanged, at 18 Feb’s low of MYR3,461, followed by 3 Feb’s low of MYR3,210. Towards the upside, the immediate resistance stays at the MYR3,800 psychological level, followed by 25 Mar’s low of MYR3,826.

Source: RHB Securities Research - 5 Apr 2021