Maintain short positions. The WTI Crude bounced up USD0.72 to close at USD58.63 – this is after the prior session’s sharp decline. Session’s low and high were posted at USD57.50 and USD59.10. Overall, the commodity’s price retracement from the high of USD66.60 on 23 Apr can be seen as a correction phase for the previous multimonth upward move that happened between 24 Dec 2018’s low of USD42.36 and the said recent high. This negative bias is further supported by the fact that the commodity is currently trading below the 200-day SMA line. Until there are signs to indicate the correction has reached an end, we are keeping our negative trading bias.

With the bias that the correction phase is still showing signs of extending, 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.

Immediate support is set at USD54.52 level, which was the low of 8 Mar. This is followed by USD51.23, the low of 11 Feb. Moving up, 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 - 27 May 2019