Maintain short positions. The WTI Crude gained USD0.44 to settle at USD71.78 – the low and high were recorded at USD70.85 and USD72.70. The latest three sessions’ price performance that took place near the uptrend line – as drawn in the chart – can be seen as the signs of consolidation, as they lacked the characteristics of a price reversal. This consolidation phase set in after the commodity experienced a relative sharp decline recently. Should the said uptrend line be broken, the downward move would likely resume. Hence, we are keeping our negative trading bias.

As there are no signs that the recent downward move has reached an end, we continue to recommend traders to keep to short positions. We initiate short positions at USD70.97, which was the closing level of 11 Oct. For risk management purposes, a stop loss can be placed at above USD76.90.

Immediate support is maintained at USD66.86, which was the low of 7 Sep. The second support is at USD64.43, the low of 16 Aug. Moving up, immediate resistance is now at USD75.27, ie the high of 3 Jul. This is followed by USD76.90, or the high of 3 Oct.

Source: RHB Securities Research - 16 Oct 2018