No follow-up from the “Bullish Harami”; maintain short positions. The WTI Crude softened USD0.97 to conclude the session at USD54.69. The low and high were registered at USD54.22 and USD55.61. The negative session suggested that there was no positive follow-through from the previous session’s “Bullish Harami” formation. Yet, based on the daily chart, the weak trend that started from the high of USD60.94 on 1 Jul remains firmly in place. The Daily RSI reading, which has not reached an oversold reading, is also indicating that the decline is not overstretched yet. We maintain our negative trading bias.

In the absence of price-reversal signals, 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.

The immediate support is set at USD50, a round figure. This is followed by USD45. Moving up, 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 of 1 Jul.

Source: RHB Securities Research - 6 Aug 2019