Maintain short positions. The WTI Crude staged a positive intraday price reversal to end the session USD0.09 higher at USD41.43. The low was posted at USD40.57. While the commodity’s price actions over the two recent sessions show signs of the bulls attempting to end the correction phase, further positive price signals are needed to confirm a valid trend reversal. Until this happens, our base case scenario for the WTI Crude to – at the minimum – retrace towards the 200-day SMA line, remains unchanged. We maintain our negative trading bias.

We recommend traders stay in short positions. We initiated these at USD40.13, the closing level of 13 Nov. To manage risks, a stop-loss can be placed above the USD43.78 threshold.

We are keeping the support levels at USD40.06, which is the low of 13 Nov, followed by USD39.50, near the 50- day SMA line. Conversely, the first resistance is set at USD42.15, followed by USD43.78 – the high of 26 Aug.

Source: RHB Securities Research - 18 Nov 2020