Maintain short positions. After bouncing off higher on Monday, the FCPO failed to retain its bullish momentum yesterday as it closed MYR13.00 lower at MYR4,303. During Tuesday’s session, the commodity opened lower at MYR4,280 to form its intraday low at MYR4,255. Despite weak momentum during the early session, mild buying interest emerged during the afternoon session, which saw the FCPO edge higher in a choppy fashion – hitting its day high of MYR4,326 before a pullback to close at MYR4,303. The narrow body candlestick suggests the bulls have taken a backward step to consolidate before a fresh attempt is made to test the immediate resistance. As mentioned in our previous note, crossing above the immediate resistance may see the commodity return to the upside path. Before that happens, we keep to our our negative trading bias.

Traders should stick to the short positions initiated at MYR4,238, or the closing level of 19 Aug. To manage trading risks, the stop-loss mark is set at MYR4,400.

The immediate support remains unchanged at MYR4,169 – the low of 6 Aug – and is followed by MYR4,074, or 22 Jul’s low. Towards the upside, the nearest resistance is sighted at the MYR4,400 round figure and then MYR4,530, which was the high of 17 Aug.

Source: RHB Securities Research - 1 Sept 2021