Maintain long positions. The WTI Crude formed another black candle in the latest trade – at one point it came in near to testing the USD59.04 immediate support with an intraday low of USD56.21. This was before it settled USD0.84 weaker at USD56.78. The closing level has placed the commodity further below the 200-day SMA line. Should the said immediate support give way in the coming sessions, chances are high for a deeper retracement to develop. Until this happens, we keep to our positive trading bias.

Until the signals for a deeper retracement phase emerge, we recommend traders stay in long positions. We initiated these at USD60.43, or the closing level of 11 Jul. For risk-management purposes, a stop-loss can be placed below the USD56.04 mark, which was the low of 3 Jul.

We are keeping the immediate support target at USD56.04, ie the low of 3 Jul. This is followed by USD54.84, which was the high of 10 Jun. On the other hand, the immediate resistance is set at USD63.81, or the high of 20 May. This is followed by USD66.60, which was the high of 23 Apr.

Source: RHB Securities Research - 18 Jul 2019