Our short call remains valid, as no strong upside movement sighted. At the end of last Friday’s session, the WTI Crude posted a USD1 gain to USD74.46. It charted a white candle that breached above the previous USD69.56 resistance level, which implies that the session was led by the buyers. However, this does not negate our negative view, as no strong upside development has been sighted yet. Despite the increase, we believe that the sellers are still in dominance of market sentiment. This is given that the commodity is still unable to break above the USD72.83 level. The current technical landscape suggests that the bearish bias in 11 Jul’s “Bearish Engulfing” candlestick pattern remains intact.

Presently, the daily chart implies that opportunities are still leaning more towards the sellers. Thus, we think it best that traders maintain short positions. For risk-control purposes, we advise setting a stop-loss above the USD72.83 mark. For the record, our short recommendation was made on 12 Jul, following a firm breach below the USD72.83 threshold.

We revise the immediate support to USD69.56, the high of 17 Apr. If this level is taken out, the following support is found at USD67.03, located at the low of 17 Jul. Conversely, we set the immediate resistance at USD72.83, obtained from the high of 22 May. This is followed by the USD75.27 resistance mark, derived from the high of 3 Jul.

Source: RHB Securities Research - 23 Jul 2018