Maintain short positions. The FCPO saw selling pressure taper yesterday as the commodity staged a strong rebound from the 200-day SMA line – climbing MYR134 to settle stronger at MYR4,400. On Thursday, the commodity started off at MYR4,265. After touching the session’s low at MYR4,245, it progressed higher on strong buying momentum, testing the MYR4,444 intraday high before the close. As mentioned before, the most active month has been changed to Mar 2022 futures contract, hence, selling pressure has eased. The bulls may eye to test the immediate resistance at the MYR4,500 level. Meanwhile, expect strong selling pressure to emerge between the range of MYR4,500 and MYR4,600. We maintain our negative trading bias until the trailing-stop is breached.

We suggest traders to keep the short positions initiated at MYR4,699, or the closing level of 14 Dec. To manage the trading risks, the trailing-stop is set at MYR4,650.

The immediate support is marked at MYR4,250 and followed by MYR4,125. On the upside, the immediate resistance is pegged at MYR4,500, and the higher hurdle of MYR4,600.

Source: RHB Securities Research - 17 Dec 2021