No clear reversal signal from the 200-day SMA line; maintain short positions. The WTI Crude ended marginally better in the latest trade, adding USD0.02 to close at USD58.54. The low and high were posted at USD58.27 and USD58.98. While the black gold is currently holding above the 200-day SMA line, after it was tested multiple times in the recent sessions, there is still a lack of a clear positive price reversal signal from the said SMA line. This leads us to believe the retracement that started from the high of USD65.65 on 8 Jan is still in place – thus we are keeping our negative trading bias.

As the bulls are not able to reverse the weak price bias, 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 at the breakeven level.

Immediate support is pegged 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. Moving up, the immediate resistance is set at USD60.31, ie the high of 9 Jan. This is followed by USD63.00, or near the middle of 8 Jan’s candle.

Source: RHB Securities Research - 20 Jan 2020