Maintain short positions as the bears are still dominating market sentiment. The WTI Crude rebounded by USD1.15 to USD66.22 yesterday. A white candle was formed, which implies that the session was led by the buyers. Nevertheless, we make no change to our bearish view. This is because no strong upside movement has occurred yet. As a result, the bullish bias in the appearance of “Bullish Harami” candlestick pattern on 5 Jun remains unconfirmed. Overall, the bears continue to dominate market sentiment. Moreover, market outlook is still pointing towards a downside, as the 14-day RSI indicator is situated below the 50-pt neutral level at 46.42 pts.

Based on the daily chart above, we believe that the correction has not reached its limit yet. Technically speaking, it is best that traders maintain short positions with a trailing-stop pegged above the USD67.16 threshold. This is in order to secure part of the trading profits. For the record, we initially made the short recommendation below the USD69.56 mark on 28 May.

Our immediate support stays at USD64.24, ie the high of 27 Feb’s “Bearish Engulfing” pattern. If this level is taken out, the following support is seen at USD61.81, which was the low of 6 Apr. On the flip side, we set the immediate resistance at USD67.16, located at the high of 14 Jan. This is followed by the USD69.56 resistance mark, or the high of 17 Apr.

Source: RHB Securities Research - 21 Jun 2018