Maintain long positions in line with the encouraging bullish bias. The weekly chart above shows that the WTI Crude is now trading at USD73.86. Over the last two weeks, the commodity has staged an encouraging comeback and hit its newest high since 2014. This implies that the bulls are in firm control of market sentiment. As the 14-week RSI indicator is still below the 70-pt overbought level, this suggests there is more room for the upside to develop. Moreover, the fact that the 50-week SMA line is situated firmly above the 200-week SMA line points towards a positive outlook – and enhances our bullish view.

From our technical perspective, we believe that opportunities still lean more towards the buyers. Hence, it is best that traders maintain long positions, with a trailing-stop pegged below the USD69.56 threshold to lock in part of the trading profits. Recall that our long call was triggered on 25 Jun, following a firm upside development above USD67.16.

To the downside, the immediate support remains at USD72.83, or the high of 22 May. In the event that this level is taken out, our next support is at the USD69.56 mark, obtained from 17 Apr’s high. Conversely, we set the immediate resistance at USD75.84, which was the low of 4 Nov 2014. This is followed by the USD77.83 resistance threshold, located at 21 Nov 2014’s high.

Source: RHB Securities Research - 5 Jul 2018