Bulls are pushing back from the 50-day SMA line; maintain short positions: The WTI formed a white candle in the latest session, thus bouncing off from the 50-day SMA line that has been under downward pressure in the previous sessions. The low and high were recorded at USD68.53 and USD70.42, before closing at USD69.85, indicating a gain of USD0.94. Despite the latest positive price action, the near-term bias would still be negative as long as the immediate resistance of USD71.40 is not breached to the upside. Furthermore, the corrective pattern that has been in development since the high of USD75.27 on 3 Jul is still incomplete. Hence, we maintain our near-term negative trading bias.

While the bears are still not able to crack the 50-day SMA line as we have been expecting, on the anticipation that the correction phase is still ongoing, we continue to advise traders to keep to their short positions. To recap, we initiated these short positions on 12 Jul, after the WTI Crude plunged below USD72.83. For risk management, a stop-loss can be placed above USD71.40.

We peg the immediate support at USD66.86, the low of 7 Sep. This is to be followed by USD64.43, the low of 16 Aug. On the upside, we are eying the immediate resistance at USD71.40, the high of 4 Sep. This is followed by USD75.27, the high of 3 Jul.

Source: RHB Securities Research - 19 Sept 2018