Maintain short positions in line with our bearish expectation. The WTI Crude inched down USD1.06 to USD64.75 last night. It charted a black candle after hovering between a low of USD64.57 and high of USD66.04. As a result, the commodity dipped to its 7-week low near the USD64.24 support level. Based on the immediate view, we believe that the bears are strong and the correction is likely to be extended further. This is also supported by the fact that the WTI Crude is trading below the 50-day SMA line at 33.98 pts, which points towards a weak outlook. Overall, our bearish view remains in play.

The current technical landscape suggests that the correction is still in play. As such, we maintain our short recommendation with a stop-loss pegged above the USD69.56 threshold. This is in order to minimise the trading risk. Recall that our short call was initially triggered on 28 May, after the WTI Crude’s price dropped firmly below the USD69.56 level.

We keep the immediate support at USD64.24, which was the high of 27 Feb’s “Bearish Engulfing” pattern. The next support is found at USD61.81, obtained from the low of 6 Apr 2018. Towards the upside, our immediate resistance is set at USD66.66, located at the high of 25 Jan’s high. This is followed by the USD69.56 resistance threshold, ie the high of 17 Apr.

Source: RHB Securities Research - 5 Jun 2018