Maintain short positions. The WTI Crude managed to narrow its losses to settle USD0.05 lower at USD59.56, while the low was recorded at USD58.66. The negative performance can be seen as a follow-up from the prior session’s sharp price rejection from the USD65.65 immediate resistance mark – signalling an interim top of its multi-month rebound. Towards the downside, we expect the USD57.70 immediate support to be tested – this is located near the 200-day SMA line. We maintain our negative trading bias. As the downside bias is still showing signs of developing, we advise traders to stay in short positions. These were initiated at USD59.61, or the closing level of 8 Jan. To manage the risk, a stop-loss can be placed above the USD63.00 level. The immediate support is kept at USD57.70, which is near the 200-day SMA line. This is followed by the USD54.76 mark, or the low of 20 Nov 2019’s “Bullish Engulfing” pattern. Towards the upside, the immediate resistance is set at USD63.00, ie near the middle of the latest candle, and is followed by USD65.65 – the high of 8 Jan.

Source: RHB Securities Research - 10 Jan 2020