Stay short, as the correction remains intact. The WTI Crude rebounded by USD0.79 to close at USD65.85 last night. It charted a black candle after having oscillated between a low of USD63.59 and high of USD65.98, which implied that the buyers led the session. However, this does not negate our bearish view, given that no strong upside development has been sighted yet. This left the positive momentum in the appearance of 5 Jun’s reversal “Bullish Harami” candlestick pattern as unconfirmed. Overall, the commodity is still in a correction. The fact that the WTI Crude is trading firmly below the 50-day SMA line implies a weak outlook, which enhances our bearish view.

The daily chart above suggests that market sentiment still favours the bears. As such, it is best that traders maintain short positions, with a trailing-stop pegged above the USD67.16 threshold to minimise the upside risk. Recall that our short recommendation was initially made on 28 May, after a firm downside development below the USD69.56 mark.

We keep the immediate support at USD64.24, which was derived from the high of 27 Feb’s “Bearish Engulfing” pattern. If this level is taken out, the next support is seen at USD61.81 – this is located at 6 Apr’s low. Towards the upside, we set the immediate resistance at USD67.16, which was the high of 14 Jan. This is followed by the USD69.56 resistance, or the high of 17 Apr.

Source: RHB Securities Research - 19 Jun 2018