Maintain short positions as there are no signs of price reversal. The WTI Crude ended the latest trading session on a negative note. It closed USD0.55 weaker to settle at USD63.14, and the session’s low and high were recorded at USD62.63 and USD63.95. The weak session means the commodity’s weak price trend, which started from the high of USD72.90 on 3 Oct, is extending. So far, the weak price trend has seen the commodity breaking multiple important technical levels ie the uptrend line (as drawn in the chart), the 200-day SMA line and also the previous support-turned-resistance mark of USD64.43. These have sent the daily RSI into oversold territory – indicating a stretched decline. However, until a price reversal signal emerges, we are keeping our negative trading bias.

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

Immediate support is eyed at USD61.81, which was the low of 6 Apr. The following support is at USD60, a round figure. Conversely, the immediate resistance is 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 - 5 Nov 2018