Maintain short positions. Yesterday, the FCPO continued its negative momentum after gapping southwards to close MYR24.00 lower. The commodity opened with a negative gap at MYR3,410, then registered an intra-day low of MYR3,375 before shifting direction upwards, to record an intra-day high of MYR3,480. After that, it pared all the gains and closed at MYR3,421 – forming a neutral bullish candlestick. The recent price action indicates that bearish momentum may be paused in the immediate term, where the commodity may move sideways. In the short-to-medium term however, the trend remains in negative. Unless the commodity reverses direction to head north towards the trailing stop, we make no change to our negative trading bias.

Traders should maintain short positions. We initiated these at the closing level of 8 Jun, or MYR4,049. To manage risks and protect profits, the trailing-stop is set above MYR3,500.

The support levels are still at MYR3,298 or 14 Jun’s low, then MYR3,160, or the 20 Jan’s low. Towards the upside, the resistance levels are pegged at MYR3,460, or the high of 18 Jun and MYR3,550 – 14 Jun’s high.

Source: RHB Securities Research - 25 Jun 2021