Stay short, in line with the ongoing 1-week bearish bias. The WTI Crude ended at USD68.76, USD0.68 higher from its prior close of USD68.08. However, this does not change our bearish view, as we do not yet see strong upside development. At this juncture, we believe that correction is still in play and a further downtrend is likely to occur in the coming sessions. This is especially so, when the 14-day RSI indicator is situated below the 50-pt neutral level at 45.09 pts – which indicates that market sentiment is weak. Moreover, the fact that the commodity is trading below the 50-pt day SMA line points towards a weak outlook. These negative indicators enhance our downside view.

As the 1-week bearish bias remains intact, opportunities are leaning more towards the sellers. Thus, it is best that traders maintain short positions. In order to minimise the upside risk, we advise that they set a stop-loss above the USD72.83 threshold. This is in line with our short recommendation on 12 Jul, following strong selling activities below the USD72.83 level.

The USD67.16 mark, ie 14 Jun’s high, is maintained as our immediate support. Should the WTI Crude slip below this level, the following support is pegged at USD63.59, the low of 18 Jun. On the flip side, our immediate support is at USD69.56, or the high of 17 Apr. This is followed by the USD72.83 resistance threshold, located at 22 May’s high.

Source: RHB Securities Research - 19 Jul 2018