Bears resume the pressure; maintain short positions. The WTI Crude broke down from the 200-day SMA line in the latest trade after hovering around this line over the recent sessions. At the close, the black gold settled USD1.60 weaker at USD56.74. The low was posted at USD56.03 – nearing the USD56.00 support. The said breakdown reinforces our negative trading bias, as it signals that the sharp retracement from the USD65.65 high – recorded on 8 Jan – has not reached bottom yet. We maintain our negative trading bias.

As the bearish bias continues to develop, 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 the USD58.82 mark.

We revised the immediate support to the USD56.00 level, followed by USD54.76 – this was the low of 20 Nov 2019’s “Bearish Engulfing” formation. Conversely, the immediate resistance is now expected at USD57.30, which is near the middle of the latest candle. This is followed by USD58.82, or the high of 21 Jan.

Source: RHB Securities Research - 23 Jan 2020