Maintain short positions. The WTI Crude traded in a volatile fashion during intraday trade – in a relatively wide range of between USD44.95 to USD46.24 – in an attempt to test the immediate resistance of UD45.30, before ending USD0.08 softer at USD45.52. The intraday price rejection, from the level near the abovementioned resistance point, shows that the sellers still have good control over the price trend, and that the correction phase is likely to extend further. Recall that the correction phase set in to digest the commodity’s sharp one-month gain of about 39%, which took place between 2 Nov and 4 Dec. The minimum retracement target is around the USD44.12 support level. We maintain our negative trading bias.

We recommend traders stay in short positions. We initiated these at USD44.55, or the closing level of 1 Dec. To manage risks, a stop-loss can be placed above the USD47.57 threshold.

No changes are made to the support levels of USD45.30, and USD44.12, or the low of 1 Dec. Similarly, the immediate resistance is kept at USD46.26, or the high of 29 Nov, followed by USD47.57, which was 5 Mar’s high.

Source: RHB Securities Research - 10 Dec 2020