Maintain short positions. Today, we visit the WTI medium-term price trend. The commodity has been advancing since the low of USD26.05 on 12 Feb 2016, forming a medium-term uptrend line (as drawn in the chart), which is still firmly intact. Nevertheless, its advancement between February and June this year sent prices to the highest level in almost 2.5 years of USD75.27. This pushed its daily RSI into the overbought level, also triggering a negative divergence in RSI reading. On the back of this, in the near term, we continue to expect some form of consolidation to develop to correct the recent months’ upward moves. Towards the downside, a firm breach of the immediate support of USD66.86 – which is also located near the 200-day SMA line – may suggest a deeper correction is developing. Hence, we are keeping our near-term negative trading bias.

With the bias for the commodity to remain in correction mode, we continue to advise traders to keep to their short positions. To recap, we opened these short positions on 12 Jul, after the WTI Crude plunged below USD72.83. For risk management, a stop-loss can now be placed above USD71.40.

We revise the immediate support to USD66.86, the low of 7 Sep. This is followed by USD64.43, the low of 16 Aug. Towards the upside, immediate resistance is now pegged at USD71.40, the high of 4 Sep. The following resistance is eyed at USD75.27, the high of 3 Jul.

Source: RHB Securities Research - 12 Sept 2018