Maintain long positions until trailing-stop is taken out. The WTI Crude formed a black candle, which at one point tested the immediate support of USD62.99. The commodity hit a low and high of USD62.28 and USD65.18, before closing at USD63.30, indicating a drop of USD1.91. The sharp decline came on the back of the overbought Daily RSI reading – which at the same time flashed out negative divergence. Should the said immediate support be breached in the coming sessions, this could suggest the rebound that started from the low of USD42.36 on 24 Dec 2018 may have ended, and a correction phase could kick in.

Until this happens, we keep to our positive trading bias. Until the risk for a correction is confirmed, we continue to recommend traders stay in long positions. These were initiated at USD49.78, or the close of 8 Jan. For risk management purposes, a trailing-stop can be placed below USD62.99.

Towards the downside, immediate support is set at USD62.99, which was the low of 16 Apr. This is followed by USD58.17, the low of 25 Mar. Conversely, the immediate resistance is maintained at USD66.86, which was the low of 7 Sep 2018. This is followed by USD70, a round figure.

Source: RHB Securities Research - 29 Apr 2019