Initiate short positions; high chance the rebound has reached an interim top. The WTI Crude experienced an intraday negative price reversal and settled decisively below the previous USD63.38 immediate resistance mark – a level the commodity has been trying to breach over the recent sessions. The trading ranged between USD59.15 and USD65.65, before ending USD3.09 weaker at USD59.61. This suggests the possibility of a price rejection from said resistance. Chances are now high that the WTI Crude’s rebound has reached an interim top. Hence we switch our trading bias to negative. Our previous long positions – initiated at the USD59.20 mark, or the closing level of 6 Dec 2019 – were closed out at the USD61.13 threshold. On the bias that the counter-trend has reached an interim top, we initiate short positions at the latest close. To manage the risk, a stop-loss can be placed above the USD63.00 level. The immediate support is revised to USD57.70, which was near the 200-day SMA line. This is followed by the USD54.76 level, or the low of the 20 Nov 2019’s “Bullish Engulfing”. Meanwhile, the immediate resistance is pegged at USD53.00 – near the middle of the latest candle – and is followed by USD65.65, ie the latest session’s high.

Source: RHB Securities Research - 9 Jan 2020