No clear reversal from the 200-day SMA line; maintain short positions. The WTI Crude rebounded from the 200-day SMA line in the latest session. Session’s low and high were posted at USD62.08 and USD63.48, before closing at USD62.87, indicating a gain of USD0.85. While the commodity has again rebounded further away from the said SMA line, that has not changed the technical picture over the past two weeks ie the commodity seems to be consolidating around the said SMA line. This implies, at this juncture, that the probability for it to resume its upward move (that started from the low of USD42.36 on 24 Dec 2018) is still low. We keep our negative trading bias.

As the bias is still for the black gold to extend its multi-week correction, 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.

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 the USD54.52 level, which was the low of 8 Mar. Moving up, 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 - 17 May 2019