Maintain short positions as there are no price reversal signs spotted yet. The WTI Crude formed a black candle, which at the closing breached below its previous near 1-week sideways consolidation zone as well as the previous immediate support of USD55. The commodity generally moved lower throughout the session – the high and low were recorded at USD57.44 and USD52.77, before it ended USD3.33 lower at USD53.43. The breakdown from the said consolidation zone and the said previous immediate support indicates that the bearish trend is still firmly in place. This is despite the daily RSI being stretched into the oversold territory of 15.57. As there is no price evidence that the steep retracement has come to an end, we maintain our negative trading bias.

As the negative trend is still showing signs of developing – despite being oversold – 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 now be placed above the USD57.96 mark.

Immediate support is revised to USD50, a round figure. This is followed by USD45.58, which was the low of 31 Aug 17. Conversely, immediate resistance is now expected at USD57.96, the high of 16 Nov. This is followed by USD61.81, the low of 6 Apr.

Source: RHB Securities Research - 21 Nov 2018