Maintain short positions as the immediate support melted. The WTI Crude formed a black candle which at the closing breached below the previous immediate support of USD52.84. Session’s low and high were posted at USD52.17 and USD54.42, before ending USD0.98 lower at USD52.64. The retracement that resumed from the high of USD63.38 is still not showing signs of reaching an end, and has been intensifying after the 200-day SMA line was breached recently. Its RSI reading is suggesting the retracement has yet to reach an oversold level. Maintain our negative trading bias.

With the commodity continuing to extend its downward move, traders are advised to stay in short positions. We initiated these at USD56.49, the closing level of 25 Sep. For risk-management purposes, a stop loss can now be placed at the breakeven level.

Immediate support is revised to USD50, a round figure. This is followed by USD47.78, which was the high of 2 Jan. Moving up, immediate resistance is now set at USD54.84, the high of 1 Oct. This is followed by USD59.54, the high of 19 Sep.

Source: RHB Securities Research - 3 Oct 2019