Maintain short positions in the absence of price reversal signals. The WTI Crude ended the latest trading session in negative territory. Intraday tone was negative as it generally moved lower for the entire session – the high and low were recorded at USD52.56 and USD50.06, before closing at USD50.29, indicating a decline of USD1.27. The latest three sessions’ price movements continue to indicate the commodity is still not ready to make a deeper rebound or reversal – the extension of the negative price trend that started from the high of USD76.90 on 3 Oct is still firmly in place. This is despite its daily RSI still flashing out an oversold reading and as positive divergence emerges. Until there are signs that the weak trend has reached an end, we keep our negative trading bias.

As the bias is still tilted towards the downtrend extension, we continue to recommend traders keep short positions. We initiated short positions at the USD70.97 level, which was 11 Oct’s close. For risk-management purposes, a stop-loss can be placed above the USD54.12 mark.

Immediate support is expected at the USD50 round figure. The following support is at USD45.58, which was the low of 31 Aug 2017. On the other hand, the immediate resistance is at USD54.12, ie the latest session’s high. This is followed by USD57.96, or the high of 16 Nov.

Source: RHB Securities Research - 29 Nov 2018