Maintain short positions in line with the ongoing bearish bias. The WTI Crude ended at USD68.06 and posted a USD2.95 loss last night. It formed a black candle that breached firmly below the previous USD69.56 support and the 50-day SMA line, which implied that the sellers were in control of the session. This has sent the commodity to its newest 2-week low – an indication that the bearish bias in the appearance of the reversal “Bearish Engulfing” candlestick pattern remains in play. Based on the immediate view, chances are high that the correction may extend in the coming sessions. Overall, there is no change to our bearish view.

The daily chart above suggests that opportunities are leaning more towards the sellers. As such, it is best that traders maintain short positions. For risk-minimisation purposes, we advise setting a stop-loss above the USD75.27 threshold. Our short call was initially triggered on 12 Jul, following a firm selling activities below the USD72.83 mark.

Towards the downside, we set the immediate support at USD67.16, which was the high of 14 Jun. The next support is seen at USD63.59, or the low of 18 Jun. On the flip side, our immediate resistance is now at USD69.56, obtained from the high of 17 Apr. The following resistance is set at the USD72.83 threshold, obtained from the high of 22 May.

Source: RHB Securities Research - 17 Jul 2018