Maintain short positions pending confirmation for a rebound. The WTI Crude experienced a wide trading range of between USD49.47 and USD51.88, before closing USD1.14 stronger at USD50.75 – still below the immediate resistance of USD51. Consequently, a “Bullish Engulfing” formation appeared. The positive performance came after the commodity’s sharp multi-week retracement sent the commodity’s RSI into an extremely oversold reading. However, the prospect for a deeper rebound to develop may only happen if the bulls manage to push prices above the USD52.29 resistance mark. Until then, we are keeping our negative trading bias.

Pending confirmation for a rebound to take place, 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 USD49.31, the low of the said “Bullish Engulfing”. This is followed by USD48.11, the low of 7 Jan 2019. Conversely, the immediate resistance is 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 - 6 Feb 2020