Bulls are not showing strength yet; maintain short positions. The WTI Crude ended the latest session unchanged at USD56.46 – indicating a directionless session. The low and high were recorded at USD55.89 and USD57.96. Broadly, the recent sessions’ price actions are still not convincing enough to indicate that a deeper rebound or total price reversal are in the process of making – this is despite the daily RSI being still stretched into oversold territory. Instead, it is resembling the characteristics of a consolidation. Hence, chances are high that once this consolidation phase is finished, the commodity may extend it multi-week retracement. On these technical interpretations, we maintain our negative trading bias.

As the chances are still tilted towards the extension of the downward move, 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 stop-loss can be placed above the USD59.35 mark, ie the high of 13 Nov.

Towards the downside, immediate support is expected at USD55, a round figure. This is followed by USD50, which is also a round figure. Conversely, immediate resistance is expected at USD58.07, the low of 9 Oct. This is followed by USD61.81, the low of 6 Apr.

Source: RHB Securities Research - 19 Nov 2018