Maintain short positions. The FCPO saw selling pressure heighten yesterday, plunging MYR213 to settle lower at MYR4,486 – recording a fresh 10-week low. The commodity began at MYR4,699 and progressed lower on strong selling momentum. It then reached the day’s low of MYR4,412 just before the close – printing a long bearish candlestick. The third month futures contract will be switching over to Mar 2022 (which settled at MYR4,266 on 15 Dec) on 16 Dec. Due to this, the commodity may see selling pressure taper and attempt to stage a technical rebound – testing the immediate resistance of MYR4,500. However, if the selling pressure continues, the FCPO will trend lower towards the 200-day SMA line, or the MYR4,250 level. With the bearish setup remaining intact, we retain our negative trading bias.

We recommend traders to maintain the short positions initiated at MYR4,699, or the closing level of 14 Dec. To mitigate the trading risks, the stop-loss is adjusted to MYR4,650, from MYR5,000.

The immediate support is revised to MYR4,250 and MYR4,125. On the flip side, the immediate resistance is eyed at MYR4,500, and then the MYR4,600 round number.

Source: RHB Securities Research - 16 Dec 2021