Maintain short positions as bears are charging ahead. The WTI Crude performed weakly in the latest session. It formed a black candle which cracked through the uptrend line as drawn in the chart, and the 50-day SMA line, albeit marginally. The session’s low and high were at USD69.43 and USD72.43, before it closed at USD69.75 – indicating a decline of USD2.17. The breakdown from the said uptrend line continues to signal that the negative bias is extending. The daily RSI reading of 41.19 is suggesting that the retracement so far has not reached the oversold level yet. Based on these, we are keeping our negative trading bias.

As the negative bias is extending, we continue to recommend that traders keep to short positions. We initiated short positions at USD70.97, which was the closing level of 11 Oct. For risk management purposes, a stop-loss can be placed above USD76.90.

Immediate support is maintained at USD66.86, which was the low of 7 Sep. The second support may emerge at USD64.43, the low of 16 Aug. Towards the upside, the 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 - 18 Oct 2018