Maintain short positions. The WTI Crude fell below the immediate support level on Friday after Thursday’s Thanksgiving holiday in the US. The heavy selloff saw the commodity decreasing significantly by USD10.24 to close at USD68.15 – just above the 200-day average line of USD67.31. The WTI Crude opened at USD78.34 and merely touched the USD78.65 day high before selling pressure started to kick in to drag the commodity lower throughout the session. The bulls attempted to pause the sell-off ahead of the US trading session, albeit shortlived. The bears continued to dominate the session towards the USD67.40 day low before it rebounded mildly to close at USD68.15. The latest long black candlestick is in line with our previous note, as we expect selling pressure to persist. We see the latest day’s low of USD67.40 as the WTI Crude’s immediate support and expect it to rebound mildly in the immediate term – which is above the 200-day average line. However, we expect more downside to be seen in the medium term if it falls below the average line territory. Hence, we maintain our negative trading bias.

Traders should stay in the short positions initiated at USD78.36, ie the closing level of 17 Nov. To mitigate the trading risks, the stop-loss threshold is set at USD80.00 or above 50-day SMA line. The immediate support level is lowered to USD67.40 – 26 Nov’s low – and followed by the USD66.35, which was 1 Sep’s low. Conversely, the nearest resistance is placed at the USD75.00 whole number and followed by the USD76.44 – 18 Nov’s low.

Source: RHB Securities Research - 29 Nov 2021