Maintain short positions, as the bears are breaching the support level. The WTI Crude’s retracement phase continues to extend, ending the latest session USD1.60 lower at USD18.27 – hence, breaching the previous USD19.00 immediate support. The bears had been attempting to breach this level since mid-March. Consequently, the latest price action implies that the multi-month downtrend – which resumed after the commodity completed its rebound on 3 Apr with a high of USD29.13 – is still extending. While the RSI reading is turning towards oversold territory, in the absence of a price-reversal signal, the trend should stay negative.

As the bears are still showing good control over the downtrend, we continue to suggest that traders stay in short positions. These were initiated at USD23.63, or the closing level of 7 Apr. To manage the risk, a stop-loss can be placed at the breakeven mark.

The immediate support is revised to USD18.00, and followed by the USD17.00 mark. Moving up, the immediate resistance is now set at USD20.22 – the latest high – followed by the USD22.00 level, which was derived from 14 Apr’s candle.

Source: RHB Securities Research - 20 Apr 2020