Stop-loss point triggered; initiate short positions. The FCPO failed to sustain above the support yesterday, slipping MYR93.00 to settle weaker at MYR4,699. The commodity started off the session at MYR4,757 and initially attempted to establish its foothold above the support of MYR4,734 – testing the MYR4,815 day high. However, sentiment became negative in the afternoon, where selling pressure dragged it towards the MYR4,694 day low before the close. After falling below the support, the FCPO printed a fresh “lower low”, indicating that the bears are back in control now. The negative momentum may follow through to reach the next support at the MYR4,650 level. In the event the commodity stages a rebound, MYR4,850 will now act as a strong resistance. Since the stop-loss mark has been breached, we shift to a negative trading bias.

We close out the long positions initiated at MYR4,929 – the closing level of 7 Dec – after the MYR4,700 stop-loss was breached. Conversely, we initiate short positions at the closing level of 14 Dec, ie MYR4,699. To manage the trading risks, the initial stop-loss threshold is set at MYR5,000.

The immediate support is changed to MYR4,650, followed by MYR4,567, which was the low of 2 Dec. On the other hand, the immediate resistance is pegged at MYR4,850 and then MYR4,949, ie the high of 8 Dec.

Source: RHB Securities Research - 14 Dec 2021