Maintain short positions. After trading lower last Wednesday, the FCPO remained in a bearish mode on Thursday as it fell by MYR26 to close at MYR3,769. Despite opening higher yesterday at MYR3,813, it only managed to tap the day’s high of MYR3,816 before changing its direction southbound towards the intraday low of MYR3,744. It then bounced mildly to close at MYR3,769. The bearish sentiment will remain valid below the MYR3,900 level which may see the commodity retrace towards its immediate support level at MYR3,711. Hence, we remain our negative trading bias.

Traders should remain in short positions. We initiated these at the closing level of 7 Jul at MYR3,795. To manage risks, the stop-loss is set at MYR3,940.

The immediate support level is maintained at MYR3,711, or the low of 7 Jul, and subsequently, MYR3,650. Towards the upside, the nearest resistance level is set at MYR3,900, followed by MYR3,978, or 6 Jul’s high.

Source: RHB Securities Research - 9 Jul 2021