Maintain short positions, as the bears are pushing prices towards the 200-day SMA line. The WTI Crude performed softly in the latest session, which saw the 200-day SMA line being tested. At the close, the black gold settled USD0.96 weaker at USD58.08, with trading ranging between USD57.91 and USD59.27. While the commodity’s retracement – which started from the failure to cross the 8 Jan’s high of USD65.65 – has reached our minimum target of retesting the said SMA line, in the absence of a clear price reversal signal, we keep to our negative trading bias.

As the retracement phase has yet to signal a bottom, 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 now be placed at the breakeven level.

The immediate support is maintained 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 revised to USD60.31, the high of 9 Jan. This is followed by USD63.00, ie near the middle of 8 Jan’s candle.

Source: RHB Securities Research - 14 Jan 2020