Maintain short positions. The WTI Crude formed a black candle to settle USD1.57 weaker at USD61.42. The low and high were registered at USD61.03 and USD63. Based on the commodity’s price pattern developed over the recent weeks, we are still expecting the commodity to extend its multi-week correction phase and increasingly, the bias for the 200-day SMA line to be retested is getting higher. This ongoing correction phase set in to correct the prior multi-month’s relative sharp upward move that took place between the low of USD42.36 on 24 Dec 2018 and USD66.60 on 23 Apr. Maintain our negative trading bias.

As we think the risk for the 200-day SMA line to be retested is getting higher, 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 eyed 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 - 23 May 2019