Maintain short positions as the bulls failed to reverse the trend. Trading of the WTI Crude was very volatile, swinging between a low and high of USD22.57 and USD28.36, before closing at USD22.76 – indicating a decline of USD2.33. As a result, 8 Apr’s “Bullish Harami” was also invalidated – indicating the risk for the commodity to retrace further is still high. The retracement phase resumed after the commodity completed its counter-trend rebound on 3 Apr with a high of USD29.13. The rebound set in to correct its previous sharp decline which reached an oversold RSI reading. Supported by both the 100-day and 200-day SMA lines which are still trending down, we keep to our negative trading bias.

As the risk for further decline is still high, we continue to suggest traders stay in short positions. These were initiated at USD23.63, the closing level of 7 Apr. To manage the risk, a stop-loss can be placed at the USD26.50 mark.

We revised the support levels to USD21.70, followed by USD19.00. Meanwhile, the immediate resistance is expected at USD24, followed by USD26.50 – both are derived from the latest candle.

Source: RHB Securities Research - 10 Apr 2020