Maintain short positions. The FCPO staged a strong rebound from its support yesterday, surging MYR51 to settle at MYR4,316. The commodity initially gapped lower to open at MYR4,161. Despite the weak opening, strong buying interest emerged near the support and lifted it higher towards the MYR4,348 day high just before the close. The latest price action has reaffirmed that the MYR4,169 level will act as a strong support. Coupled with the RSI, which has started to round up, we may see a follow through momentum test the MYR4,400 immediate resistance. However, expect selling pressure to emerge near the resistance level. As long as the stop-loss remains intact, we stick to our negative trading bias.

Traders should retain their short positions initiated at MYR4,238, or the closing level of 19 Aug. To manage trading risks, the stop-loss is adjusted to MYR4,410.

The nearest support remains at MYR4,169, the low of 6 Aug, followed by MYR4,074, the low of 22 July. Towards the upside, the immediate resistance is eyed at the MYR4,400 round figure, followed by MYR4,530 – the high of 17 Aug.

Source: RHB Securities Research - 24 Aug 2021