Retracement phase is confirmed; initiate short positions. The WTI Crude continued to experience a relatively wide trading range for the third consecutive session – a departure from its recent weeks’ narrow intraday range. After hitting a low and high of USD39.35 and USD41.87, the black gold settled USD1.60 lower at USD39.77 – crossing below both the 50- and 200-day SMA lines. The latest three sessions’ steep retracement came following multiple failed attempts to cross above the USD43.52 resistance point recently. We switch our trading bias from positive to negative.

Our previous long positions initiated at the USD41.96 mark – the closing level of 21 Jul – were closed out at USD41.50 on 3 Sep. Concurrently, we initiated short positions. To manage risks, a stop-loss can be placed above USD42.00.

The immediate support is revised to USD38.82 – the low of 30 Jul. This is followed by USD37.08, which is the low of 25 Jun. Moving up, resistance points are pegged at USD40.50 and USD41.87 – both are derived from the latest candle

Source: RHB Securities Research - 8 Sept 2020