Maintain short positions while tightening up trailing-stop. The WTI Crude formed a white candle in the latest session after it experienced a sharp intraday reversal. The commodity initially dropped to USD49.41, before rebound set in and drove prices to the high of USD52.20, before ending USD1.16 higher at USD51.45. The sharp intraday reversal happened on the back of the daily RSI reading, which is still flashing out an oversold condition and showing a positive divergence. To confirm the end of the steep retracement that started from the high of USD76.90 on 3 Oct – ie for a possible rebound or total price reversal to take place – the commodity needs to first overcome the USD52.56 immediate resistance. Until this happens, we keep our negative trading bias.

Until there is a confirmation for a rebound to take place, 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 now be placed above the USD52.56 mark.

Immediate support is still pegged at the USD50 round figure. This is followed by USD45.58, which was the low of 31 Aug 2017. Moving up, the immediate resistance is revised to USD52.56, which was the low of 28 Nov. This is followed by USD54.12, ie the high of 23 Nov.

Source: RHB Securities Research - 30 Nov 2018