No clear reversal from the 200-day SMA line; maintain short positions. The WTI Crude extended its recent sessions’ price behaviour into the latest session – trading around the 200-day SMA line without showing any clear indication of reversing towards the upside. The session’s low and high were registered at USD60.85 and USD62.34, before closing at USD62.02. Broadly, based on the price actions around said SMA line, the bias is still tilting towards the extension of the multi-week correction that started from the high of USD66.60 on 23 Apr in the form of a retracement. As a result, we keep our negative trading bias.

On expectations that the correction phase still has legs to go further, we retain our recommendation for traders to 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.

We are eyeing the immediate support 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. Conversely, 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 - 16 May 2019