Stay short, as the bearish bias is still exerting itself. Last night, the WTI Crude inched up USD0.70 to USD69.46, which implies that the session was led by the buyers. However, this does not change our bearish view, given that no strong upside development occurred yet. At this juncture, we believe that the bearish bias in 11 Jul’s “Bearish Engulfing” candlestick pattern has not been fully negated yet. In addition, we highlight that the 14-day RSI indicator is still fluctuating below the 50-pt neutral level at 47.89 pts. This indicates that market sentiment is still weak, thereby enhancing our downside view.

In the absence of a strong upside development, this implies that the WTI Crude has not yet found its bottom. As such, we believe it is best that traders maintain short positions, with a stop-loss pegged above the USD72.83 threshold. This is so that the upside risk is kept at a minimum. Recall that we initially made the short recommendation below the USD72.83 mark on 12 Jul.

To the downside, our immediate support is set at USD67.16, located at the high of 14 Jun. If this level is taken out, the following support is seen at USD63.59, which was 18 Jun’s low. Meanwhile, we keep the immediate resistance at USD69.56, obtained from the high of 17 Apr. The following resistance is found at the USD72.83 mark, or the high of 22 May.

Source: RHB Securities Research - 20 Jul 2018