Maintain short positions. The FCPO underwent a strong rebound yesterday, jumping MYR100.00 to close at MYR4,750. After the holiday break, the commodity started off Monday’s session with positive sentiment, and gapped up to open at MYR4,805. It rose to test the session’s high of MYR4,830, before profit-taking activities dragged it lower to print the session’s low of MYR4,734 before closing. During the after-hours trading session, the commodity climbed MYR30 and last traded at MYR4,780. Even though the day trading session’s closing level was lower than the opening – which pointed to a bearish body candlestick – the commodity broke past the previous resistance of MYR4,737. If the positive sentiment continues to be in effect, strong buying interest may lift the commodity towards the 50-day SMA line. Although the FCPO is showing early signs of a Bullish Reversal, we still think there is strong selling pressure near the medium-term moving average line. It may undergo a consolidation near the MYR4,734 support, before making a fresh attempt to break past the 50-day SMA line. At this stage, we maintain a negative bias until the trailing-stop has been breached.

Traders should hold on the short positions initiated at MYR4,849, or the closing level of 26 Nov. To mitigate the trading risks, the trailing-stop is set at MYR4,840.

We revise the immediate support to MYR4,734 (6 Dec’s low). followed by MYR4,567 (2 Dec’s low). Towards the upside, the nearest resistance is at MYR4,832 – 29 Nov’s low – followed by MYR4,995 or the high of 25 Nov.

Source: RHB Securities Research - 7 Dec 2021