Maintain short positions as the commodity failed to stage a rebound. The WTI Crude failed to hold to its earlier session’s attempt to stage a rebound, settling USD0.50 weaker at USD49.61 and breaching below the previous immediate support of USD50. This was after it hit an intraday high of USD51.55. The weak performance continues to signal that the commodity’s retracement leg is still firmly in place – this is despite the RSI flashing an extremely oversold reading. At this juncture, we are still keeping our negative trading bias until a price reversal signal emerges.

As the bulls are still unable to affect a price reversal signal, 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 USD48.11, the low of 7 Jan 2019. This is followed by USD47 round figure. Moving up, the immediate resistance set at USD51, derived from 4 Feb’s candle. This is followed by USD52.29, derived from 1 Feb’s candle.

Source: RHB Securities Research - 5 Feb 2020