Maintain short positions as there are no clear signs for a reversal yet. The WTI Crude added USD1.71 to close at USD55.66 in the latest trade. Intraday tone was positive, as the black gold generally trended up for the whole session, with the low and high registered at USD54.15 and USD56.05. Consequently, a “Bullish Harami” was formed. Nevertheless, this is not sufficient to signal that an interim low is in place and that a rebound is in the process of developing. Until further positive price actions are observed, we keep to our negative trading bias.

Until the bulls are able to signal a change in control over the price trend, we continue to recommend traders to stay in short positions. We initiated these at USD55.30, which was the closing level of 19 Jul. For risk management purposes, a stop-loss can now be placed above the USD58.82 mark.

Immediate support is still pegged at USD50, a round figure. This is followed by USD45. Towards the upside, the immediate resistance is expected at USD58.82, which was the high of 31 Jul. Breaking this could see the market test the USD60.94 high on 1 Jul.

Source: RHB Securities Research - 5 Aug 2019