Maintain short positions as correction mode is extending. The black gold ended the latest trading session on the weak side, at the closing it breached through the 200-day SMA line and the previous immediate support of USD58.17 (albeit marginally). Trading took place between USD57.33 and USD61.41, before closing at USD57.91, indicating a decline of USD3.51. Broadly, the multi-week correction phase that started from the high of USD66.60 on 23 Apr is extending. While further price retracement in the coming sessions is likely to push the Daily RSI into oversold reading territory, in the absence of price reversal signals, we are keeping our negative trading bias.

As the bears are now in firm control over the price direction, 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 now be placed at the breakeven level.

We revised the immediate support to the USD54.52 level, which was the low of 8 Mar. This is followed by USD51.23, the low of 11 Feb. Conversely, the immediate resistance is now eyed at USD63.81, the high of 20 May. This is followed by USD66.60, or the high of 23 Apr.

Source: RHB Securities Research - 24 May 2019