Maintain short positions as there are no signs of reversal. The WTI Crude extended its rebound in the latest session. It gained USD0.51 to settle at USD59.14, after it reached a low and high of USD58.13 and USD59.57. The recent two sessions’ rebound is still not conclusive to suggest the commodity’s multi-week correction has reached an end, instead it can be seen as a minor rebound after the recent sharp decline, which saw a breakdown from the 200-day SMA line. Based on these observations, we are keeping our negative trading bias.

Until there are further positive price actions to signal the said correction has been completed, 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.

Towards the downside, immediate support is expected at the USD54.52 level, which was the low of 8 Mar. This is followed by USD51.23, the low of 11 Feb. On the other hand, 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 - 29 May 2019