Maintain short positions as the retracement has not shown signs of hitting a bottom. The WTI Crude traded in a relatively wide range of USD49.80 and USD51.97, before closing USD1.45 weaker at USD50.11. The negative closing also pushed the commodity below the previous support zone of between USD51.38 and USD50.52. Despite the recent weeks’ sharp decline which also witnessed the RSI reading flashing out an extreme oversold condition, there is still no technical evidence to indicate the said retracement has reached an end. Until there are positive price reversal signals spotted, we are sticking with our negative trading bias.

Until bulls showing signs of staging a rebound appear, 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 USD52.29 level.

The immediate support is revised to USD50, a psychological level. This is followed by USD48.11, the low of 7 Jan 2019. Conversely, the immediate resistance is now envisaged at USD51, derived from 4 Feb’s candle. This is followed by USD52.29, derived from 1 Feb’s candle.

Source: RHB Securities Research - 4 Feb 2020