200-day SMA line still under pressure; maintain short positions. The WTI Crude settled USD0.74 higher at USD61.78. Trading took place between USD60.69 and USD62.11. The commodity continued to trade around the 200-day SMA line over the past few sessions – without showing signs of reversing toward the upside. Towards the downside, the risk for the ongoing multi-week correction to slide lower would be enhanced, should the said SMA line fail to hold. Hence, we are keeping our negative trading bias.

On the expectation that the multi-week correction phase is likely to extend in the form of a deeper retracement, we stick with our recommendation that traders stay in short positions. These were initiated at USD61.81, or the closing level of 2 May. For risk-management purposes, a stop-loss can be placed above the USD66.60 level.

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

Source: RHB Securities Research - 15 May 2019