Maintain short positions until a clear rebound signal emerges. The WTI Crude ended the latest trading session on a negative note. For the intraday, the black gold swung between a low and high of USD49.65 and USD51.79 before ending USD0.52 lower at USD50.93. The negative session meant there was still no price confirmation that the commodity is ready for a deeper rebound despite the strong intraday price reversal in the prior session. The increasing bias for a deeper rebound to develop is supported by the WTI Crude’s recent sharp retracements, which has sent the daily RSI into oversold territory, while – at the same time – flashing out positive divergences. We are looking at the recapturing of the USD52.56 immediate resistance as the required price signal for a deeper rebound to develop. Until this happens, we maintain our negative trading bias.

Pending possible deeper price rebounds or total price reversal signals, we continue to recommend traders to keep short positions. Recall that 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 USD52.56 mark.

Towards the downside, immediate support is expected at the USD50 round figure. This is followed by the USD45.58 threshold, which was the low of 31 Aug 2017. On the other hand, the immediate resistance is revised to USD52.56, or the low of 28 Nov. This is followed by the USD54.12 mark, ie the high of 23 Nov.

Source: RHB Securities Research - 3 Dec 2018