Maintain short positions as the multi-week correction leg is still incomplete. The WTI Crude closed the latest trading USD0.34 higher at USD63.10. The trading range was between USD62.45 and USD63.81. While the positive session has placed the commodity further above the 200-day SMA line, the recent rebound from the said SMA line is still considered as weak and does not resemble the characteristics of a total price reversal, at least for now. This implies chances are still high that the commodity’s correction phase that started (on the back of overbought Daily RSI and negative divergence) from the high of USD66.60 on 23 Apr is still incomplete. Maintain our negative trading bias.

As we continue to believe the multi-week correction phase is still incomplete, 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 riskmanagement 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. 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 - 21 May 2019