Maintain short positions as sellers are still in control. The WTI Crude registered a USD0.43 loss to close at USD67.20 last night, and left a black candle. This shows that the bears were in control of the session. Presently, we believe that the 1-month bearish bias has not reached its limit yet. This is especially when the commodity continues to trade below the 50-day SMA line, which points towards a weak outlook. In addition, we highlight that market sentiment is weak, given that the 14-day RSI indicator is situated below the 50-pt neutral level, at 43.31 pts. These negative indicators enhance our bearish view.

As we do not see any strong upside development in the daily chart above, this implies that the sellers are still in control of market sentiment. As such, there is no change to our short call. We advise that investors set a stop-loss above the USD71.10 threshold, so that the trading risk is kept to a minimum. For the record, we made a short recommendation on 12 Jul, following a strong downside development below USD72.83.

Our immediate support is maintained at USD67.03, obtained from the low of 17 Jul. The next support is pegged at the USD64.22 threshold, located at the low of 5 Jun’s “Bullish Harami” pattern. Conversely, we set the immediate resistance at USD71.10, or the high of 20 Jul. The next resistance is set at the USD75.27 mark, derived from the high of 3 Jul.

Source: RHB Securities Research - 14 Aug 2018