Maintain short positions. The WTI Crude ended the latest session flat at USD19.87 after it failed to hold on to its intraday gains – the high was posted at USD20.53. Despite trading near the USD19.00 support level over the latest two sessions, the commodity failed to signal a reversal from this level. This implies that the multi-month retracement leg, which resumed from the high of USD29.13 on 3 Apr, remains firmly in place. A downside breach of said support could open the door for further downsides, as the bears have been trying to breach this level since mid-March. Hence, we are keeping our negative trading bias.

With no signs of the bulls emerging from the area near the USD19.00 support level, we continue to suggest traders stay in short positions. These were initiated at USD23.63, or the closing level of 7 Apr. To manage the risk, a stoploss can be placed at the breakeven mark.

We are keeping the immediate support at the USD19.00 threshold, followed by the USD18.00 level. Towards the upside, the immediate resistance is set at USD22.00, which was derived from 14 Apr’s candle. This is followed by USD24.74, or the high of 13 Apr.

Source: RHB Securities Research - 17 Apr 2020