Remain in short positions, in line with the ongoing retracement. The WTI Crude ended at USD66.36 and posted a USD0.26 gain last night. Presently, we do not see any strong upside following through – which leaves the momentum in 5 Jun’s reversal “Bullish Harami” candlestick pattern unconfirmed. As a result, we deem that the current retracement is still in effect, and may likely be extended further. Also, we highlight that the commodity is still trading below the 50-day SMA line. Technically speaking, market sentiment is still weak, which cements our downside view.

In the absence of a strong bullish bias, we believe that bears still control market sentiment. Hence, it is best that traders maintain short positions, with a stop-loss pegged above the USD69.56 threshold to minimise the upside risk. For the record, we made the short recommendation on 28 May, after the WTI Crude’s dipped below USD69.56.

We keep the immediate support at USD64.24, the high of 27 Feb’s “Bearish Engulfing” pattern. The next support is at USD61.81, or the low of 6 Apr 2018. On the flip side, the immediate resistance is set at USD66.66, located at the high of 25 Jan. If this level is taken out, the following resistance is found at USD69.56, or 17 Apr’s high.

Source: RHB Securities Research - 13 Jun 2018