More opportunities towards downside; stay in short positions. The WTI Crude ended at USD68.96 and posted a USD1.30 gain last night. It left a white candle, which implies that the session was led by the buyers. However, this does not change our bearish view, given that no strong upside movement was sighted. As a result, the momentum in the appearance of 24 Jul’s “Bullish Engulfing” candlestick pattern remains unconfirmed. Technically speaking, the commodity is still being pressed southwards. We also note that the 14-day RSI indicator is below the 50-pt neutral level, at 48.23 pts. This indicates that market sentiment is weak, which enhances our downside view.

In the absence of a strong upside development, it is best that traders maintain short positions. To minimise the upside risk, investors can set a stop-loss above the USD71.10 mark. This is in line with our short recommendation 12 Jul, following a firm breach below the USD72.83 threshold.

Presently, we keep the immediate support at USD67.03, the low of 17 Jul. In the event that this level is taken out, our next support is at USD64.22, located at the low of 5 Jun’s “Bullish Harami” pattern. Meanwhile, we set the immediate resistance at USD71.10, derived from the high of 20 Jul. This is followed by the USD72.83 resistance, or the high of 22 May.

Source: RHB Securities Research - 3 Aug 2018