Maintain long positions. The WTI Crude snapped five consecutive positive sessions, declining USD0.53 to settle at USD66.32 – forming a Dark Cloud Cover bearish candlestick pattern. It began Friday’s session with a gap up to open at USD66.95. After testing the intraday high of USD67.52, bullish momentum waned, sending the index towards the day’s low of USD66.17 before settling at USD66.32. The bearish pattern suggests that the commodity may pause its recent rally and move sideways for consolidation. Selling pressure emerged above the USD67.02 resistance level. Despite stiff resistance, the commodity did not breach the support level, indicating that it is still moving on a “higher low” price pattern, and the bullish formation is still intact. With the RSI above the 50% threshold, it is likely to resume its upward movement in the coming sessions. Hence, we stick to our positive trading bias.

Traders should maintain the long positions initiated at USD66.05, or the closing level of 24 May. To manage risks, the stop-loss threshold is placed at USD63.90.

The nearest support remains at the USD65.00 psychological level, followed by USD63.90 – the low of 7 May. The immediate resistance is seen at USD67.02, or the high of 18 May, and followed by USD68.00.

Source: RHB Securities Research - 31 May 2021