Maintain short positions as the bulls are still capped by the immediate resistance. The WTI Crude staged a positive intraday price reversal, after testing the USD51.30 immediate support with a low of USD50.88, before rebounding to settle flat at USD52.05. Despite the relatively sharp intraday price reversal, the commodity is still capped by the USD52.29 immediate resistance – suggesting that there is no price confirmation for a stronger rebound to take place – despite the emergence of the “Bullish Engulfing” formation on 5 Feb. We maintain our negative trading bias.

In the absence of a price reversal confirmation, 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 pegged at USD51.30, which was derived from 13 Feb’s candle. This is followed by USD50.30, or 12 Feb’s candle. Meanwhile, the immediate resistance is set at USD52.29, which was derived from 1 Feb’s candle. This is followed by the USD53.50 mark – derived from 29 Jan’s candle.

Source: RHB Securities Research - 19 Feb 2020