Maintain short positions as the commodity is still capped by the 200-day SMA line. The WTI Crude ended the latest session better by USD0.79 at USD55.96. The session’s trading range was between USD55.42 and USD56.67. The positive session can be regarded as just a minor bounce, after the previous session’s sharp decline, which sent the commodity back below the 200-day SMA line. For now, provided the black gold is still capped by the said SMA line, we are keeping our negative trading bias.

As we continue to see the bias is strong for the commodity to experience a deeper retracement from its current level, we continue to recommend traders to stay in short positions – we initiated these at USD55.17, the closing level of 29 Nov. For risk-management purposes, a stop loss can be placed at above USD58.74.

The immediate support is expected to emerge at USD54.76, which was the low of 20 Nov’s “Bullish Engulfing” formation. This is followed by USD52.39, or the low of 12 Oct. Conversely, the immediate resistance is now expected at USD58.74, which was the high of 22 Nov. This is followed by USD63.38 – the high of 16 Sep.

Source: RHB Securities Research - 3 Dec 2019