Maintain long positions on the expectation of rebound extension. The WTI Crude formed a white candle in yesterday’s session. It closed USD0.65 higher at USD51.65, after it swung between a low and high of USD50.70 and USD52.43. The price formation that has been in development since the low of USD49.71 on 29 Nov is suggesting the commodity is still in a sideways rebound phase. Towards the upside, a firm breach of the immediate resistance of USD54.12 would likely signal that the rebound would be much deeper. Based on this, we are keeping our positive trading bias.

With the rebound phase is still ongoing and may extend even deeper, we continue to recommend that traders maintain long positions. We initiated these positions at USD52.95, or the closing level of 3 Dec. For riskmanagement purposes, a stop-loss can be placed below the USD49.41 level.

Towards the downside, immediate support is maintained at USD49.41, ie the low of 29 Nov. The second support is expected at the USD45.58 threshold, which was the low of 31 Aug 2017. Overhead resistance is set at the USD54.12 mark, ie the high of 23 Nov. This is followed by USD57.96, or the high of 16 Nov.

Source: RHB Securities Research - 12 Dec 2018