Maintain short positions as the commodity is still shy of a rebound confirmation. The WTI Crude continued to experience a wide swing in the latest session – the low and high were posted at USD50.24 and USD52.20 – before closing USD0.20 better at USD50.95. The commodity has been in a minor rebound mode over the past two sessions – this was after its RSI reading reached an extremely oversold level recently. However, to confirm the prospect for a stronger rebound is taking place, the 5 Feb’s “Bullish Harami” needs to be confirmed by an upside breach of the USD52.29 resistance mark. Until then, we keep to our negative trading bias.

As the said “Bullish Harami” is still unconfirmed, 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 USD50.24, the latest low, followed by USD49.31, the low of the 5 Feb’s “Bullish Engulfing” pattern. Meanwhile, the immediate resistance is now set at USD52.29, derived from 1 Feb’s candle. This is followed by USD53.30, derived from 31 Jan’s candle.

Source: RHB Securities Research - 7 Feb 2020