Maintain short positions. After a whip-sawing session, the FCPO eked out a minor gain of MYR28.00 yesterday to close stronger at MYR4,392 – moving closer to the MYR4,400 resistance. After the commodity opened flat at MYR4,381, it whip-sawed between MYR4,319 and MYR4,413 before closing at MYR4,392. Over the last four sessions, the commodity has been rising on a “higher low” pattern, with buying interest gaining momentum. However, as mentioned in a previous note, reaching MYR4,400 will see the re-emergence of selling pressure. Unless the strong momentum lifts it higher, the FCPO may consolidate sideways between MYR4,300 and MYR 4,400. At this juncture, we maintain a negative trading bias until the stop-loss is breached.

We recommend that traders hold on to short positions, which were initiated at MYR4,238, or the closing level of 19 Aug. To manage trading risks, the stop-loss is set at MYR4,400.

The immediate support is at MYR4,300, then MYR4,169 or 6 Aug’s low. Towards the upside, the nearest resistance remains at MYR4,400, then MYR4,530 or the high of 17 Aug.

Source: RHB Securities Research - 27 Aug 2021