Immediate support breached; maintain short positions. The WTI Crude ended the latest session on the weak side to cross below the previous immediate support of USD52.13. The intraday low and high were posted at USD50.96 and USD53.36, before closing USD0.58 lower at USD51.56. The soft performance continues to signal the retracement leg that started from the high of USD65.65 on 8 Jan is still not showing signs of reaching an interim low – this is despite the recent sharp price retracement after the downside breach of the 200-day SMA line has flashed out an oversold RSI reading of 23.02. Maintain our negative trading bias.

Given that the retracement is still showing signs of developing, 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 USD54.37 mark.

The immediate support is revised to USD51.38, ie the low of 10 Oct 2019. This is followed by USD50.52, the low of 7 August 2019. Meanwhile, the immediate resistance is revised to USD53.36, the latest high. This is followed by USD54.37, the high of 29 Jan.

Source: RHB Securities Research - 3 Feb 2020