Maintain short positions as the bulls are still soft. The WTI Crude failed to hold on to its intraday gains, settling USD0.20 weaker at USD58.34. At one point, it tested both the 200-day SMA line and the immediate support of USD57.70 with a low of USD57.68. The negative session means the downward bias that started from the high of USD65.65 on 8 Jan is still not showing clear signs of bottoming – as we are not observing a clear rebound from the said SMA line. Towards the upside, a stronger rebound may take place if the immediate resistance of USD58.82 is breached to the upside. Maintain our negative trading bias.

As the bulls are still lacking strength to stage a rebound, 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 above USD58.82.

Immediate support is set at USD57.70, which is near the 200-day SMA line. This is followed by the USD56.00 level. Meanwhile, the immediate resistance is now pegged at USD58.82, the high of the latest session, followed by USD60.31, ie the high of 9 Jan.

Source: RHB Securities Research - 22 Jan 2020