Stay in short positions as the bearish bias is still exerting itself. Last night, the WTI Crude inched up USD0.16 to USD69.17 and left a white candle. However, we make no change to our bearish view, as no strong upside development was sighted yet. Overall, the bearish bias in the appearance of the “Bearish Engulfing” candlestick pattern on 11 Jul continues exerting itself. Based on the current technical landscape, we believe that the correction could still be extended once the breather above the USD67.03 mark ends.

As long as we do not see any strong upside development, this implies that the correction is still in play. Hence, we advise traders to maintain short positions with a stop-loss pegged above USD71.10 to minimise trading risks. Recall that our short call was made on 12 Jul, after the WTI Crude’s price dropped firmly below the USD72.83 threshold.

The USD67.03 mark, ie 17 Jul’s low, remains as our immediate support. If this level is taken out, the next support is pegged at USD64.22, the low of 5 Jun’s “Bullish Harami” pattern. On the flip side, we set the immediate resistance at USD71.10, the high of 20 Jul. The following resistance is set at the USD72.83 mark, or the high of 22 May.

Source: RHB Securities Research - 8 Aug 2018