Maintain short positions as bears are still in firm control. The WTI Crude formed a black candle in the latest trading session, and at the closing, breached below the previous immediate support of USD64.43. The commodity moved progressively lower throughout the session – the high and low were recorded at USD65.39 and USD63.11, before closing USD1.62 weaker at USD63.69. The breakdown from the pervious crucial immediate support is signalling that the negative trend is extending further, after the 200-day SMA line was broken recently. While the daily RSI reading of 27.14 suggests that the retracement has reached the oversold threshold, we are keeping our negative trading bias in the absence of any price actions to confirm a reversal.

Given that the negative bias is still developing, we continue to recommend traders to keep to short positions. We initiated short positions at USD70.97, which was the closing of 11 Oct. For risk management purposes, a stop-loss can now be placed above the latest session’s high of USD65.39.

Towards the downside, the immediate support is now set at USD61.81, which was the low of 6 Apr. This is followed by USD60, a round figure. Towards the upside, the immediate resistance is now expected at USD64.43, or the low of 16 Aug. This is followed by USD67.95, which was the high of 29 Oct.

Source: RHB Securities Research - 2 Nov 2018