Maintain short positions on expectations of the 200-day SMA line being tested. The WTI Crude eased during the latest trade to close USD0.52 weaker at USD59.04. This came after it reached a low and high of USD58.85 and USD59.78. The weak performance is a continuation from the failed attempt to cross the USD65.65 immediate resistance on 8 Jan. Towards the downside, we expect the commodity to retest the 200-day SMA line. For now, we are keeping to our negative trading bias.

As the negative bias is still showing progress, 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 set 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. Meanwhile, the immediate resistance is set at USD63.00, ie near the middle of the latest candle. This is followed by USD65.65 – the high of 8 Jan.

Source: RHB Securities Research - 13 Jan 2020