Maintain short positions as the multi-week correction phase may still be extending. The black gold again tested the 200-day SMA line in the latest session. Session’s low and high were USD60.92 and USD62.21, before ending USD0.42 lower at USD61.70. On a broader picture, we are still expecting the commodity to extend its multi-week correction phase. This correction phase was meant to correct the commodity’s previous upward move which took place between the low of USD42.36 on 24 Dec 2018 and the high of USD66.60 on 23 Apr. As such, we keep our negative trading bias.

On the expectation that the bears would remain in the control seat, we remain with our recommendation for traders to stay in short positions. These were initiated at USD61.81, or the closing level of 2 May. For riskmanagement purposes, a stop-loss can be placed above the USD66.60 level.

Immediate support is expected at USD58.17, or the low of 25 Mar and slightly below the 200-day SMA line. This is followed by USD54.52, which was the low of 8 Mar. Moving up, the immediate resistance is set at USD66.60, ie the high of 23 Apr. This is followed by USD70, a round figure.

Source: RHB Securities Research - 10 May 2019