Maintain short positions. The WTI Crude saw the return of the downtrend movement yesterday after breaching below the immediate support to close USD3.77 lower at USD66.18 – this was beneath the 200-day average line. It opened at USD70.04 and attempted to rise higher as it touched the day high of USD71.22 ahead of the Asian trading session. Selling pressure then emerged to reverse the direction southwards towards the close. The strong selling pressure dragged the commodity towards the intraday low of USD64.43 before rebounding moderately to close at USD66.18. The latest long black body candlestick with lower shadow – crossing below the 200-day average line – is firming up for the selling pressure to persist below the average line. Nevertheless, since the RSI is hovering below the oversold territory of 30%, we expect a mild rebound towards USD67.40 before continuing to fall further towards the USD64.43 support. As such, we keep to our negative trading bias.

Traders should stick to the short positions initiated at USD78.36, ie the closing level of 17 Nov. To mitigate trading risks, the stop-loss threshold is set at the USD75.00 threshold.

The immediate support is placed at USD64.43 – 30 Nov’s low – and followed by USD61.50, which was 23 Aug’s low. The nearest resistance is set at the USD67.40 – 26 Nov’s low – and followed by USD75.00.

Source: RHB Securities Research - 1 Dec 2021