Traders are advised to stay in short positions, as bearish bias is still intact. After plunging below the USD72.83 mark on 11 Jul, the WTI Crude extended the correction to USD70.33 and posted a USD0.05 loss. It formed a small black candle after oscillating between a low of USD69.23 and high of USD71.24, which implies that the session was led by the sellers. As we do not see any strong upside movement, this implies that the bearish bias in the appearance of 11 Jul’s reversal “Bearish Engulfing” candlestick pattern has not been negated yet. Overall, our downside view remains intact.

As such, we maintain our short recommendation with a new stop-loss pegged above the USD75.27 mark. This is in order to minimise the upside risk. Recall that our short call was initially triggered on 12 Jul, after the commodity dropped firmly below the USD72.83 threshold.

We set the immediate support at USD69.56, obtained from the high of 17 Apr. Should the WTI Crude’s price drop below this level, the next support is pegged at USD67.16, which was the high of 14 Jun. Conversely, our immediate resistance is maintained at USD72.83, or high of 22 May. The following resistance is revised to USD75.27, located at the low of 4 Nov 2014.

Source: RHB Securities Research - 13 Jul 2018