Traders are advised to stay in short positions in line with the ongoing bearish bias. The WTI Crude ended at USD68.25 and registered a USD0.36 gain last night. As a result, a “Bullish Harami” candlestick pattern was formed, which suggests that the 2-week bearish bias is nearing its limit. However, this does not negate our bearish view, given that no strong upside movement has been sighted yet. At this juncture, we believe that the bearish bias in the appearance of the “Bearish Engulfing” candlestick pattern has not been fully negated yet. Overall, the bears are still dominating market sentiment.

The daily chart above suggests that more opportunities are leaning towards the sellers. As such, it is best that traders maintain short positions with a new stop-loss pegged above the USD71.10 threshold. This is in order to minimise the upside risk. Recall that we initially made the short call on 12 Jul, after a strong downside development below the USD72.83 mark.

We set the immediate support is now at USD67.03 mark, which was the low of 17 Jul. The following support is found at the USD64.22 mark, which was the low of 5 Jun’s “Bullish Harami” pattern. Conversely, the immediate resistance is revised to USD71.10, located at the high of 20 Jul. This is followed by the USD72.83 resistance, located at the high of 22 May.

Source: RHB Securities Research - 25 Jul 2018