Bullish bias is strong above the USD67.16 mark, turn to long positions. The WTI Crude ended last Friday’s session at USD68.58, and registered a USD3.04 gain. It charted a white candle that breached firmly above our previous trailing-stop of USD67.16 and the 50-day SMA line. This confirmed the positive momentum that we observed in 5 Jun’s reversal “Bullish Harami” candlestick pattern. From our technical standpoint, we believe that the recent correction has reached its end. In addition, we note that the 15-day RSI indicator has also returned above the 50-pt neutral level at 56.22 pts. This implies that market strength has returned, thereby enhancing our positive view.

Based on the daily chart, we think that opportunities are more towards the buy side now. As such, traders are advised to exit the current short positons and enter fresh long ones. In order to minimise downside risk, it is advisable to set a stop-loss below the USD64.24 mark.

Our immediate support is now at USD67.16, or the high of 14 Jan. This is followed by the next support at the USD61.81 mark, which is located at the low of 6 Apr. On the flip side, we set the immediate resistance at USD69.56, which was the high of 17 Apr. If this level is taken out, the following resistance is found at the USD72.83 threshold, which was obtained from 22 May’s high.

Source: RHB Securities Research - 25 Jun 2018