Maintain short positions, as the bulls are still capped by the 200-day SMA line. The WTI Crude tested the 200-day SMA line in its latest session with an intraday high of USD59.10. This was before it slid back to close at USD57.83, indicating a gain of USD0.17. The black gold’s inability to stay above said line suggests there is still a lack of strength on the part of the bulls. Overall, the negative bias that started from the failed attempt to cross above the USD60.28 immediate resistance remains in place. We maintain our negative trading bias.

As the bulls are still unable to generate signals that suggest the retracement leg has reached an end, we continue to recommend traders stay in short positions. We initiated these at USD56.25, which was the closing level of 2 Jul. For risk-management purposes, a stop loss can be placed above the USD60.28 mark.

The immediate support is still expected to emerge at USD54.84, which was the high of 10 Jun. This is followed by the USD50 round figure. On the other hand, the immediate resistance is set at USD60.28, which was the high of 1 Jul. This is followed by USD63.81, or the high of 20 May.

Source: RHB Securities Research - 10 Jul 2019