Maintain long positions as the commodity is still confined within a sideways consolidation zone. The WTI Crude formed a black candle to settle USD1.70 lower at USD51.99. The low and high were at USD51.33 and USD53.64. However, the negative session did not change the commodity’s sideways price pattern that has been developing over the past two weeks. The ongoing consolidation phase is still confined to the zone made from the immediate resistance of USD54.55 and around the 50-day SMA line. Until we see further negative price actions that could negate this sideways consolidation phase, we are keeping our positive trading bias.

As the case for a sideways consolidation is still valid, before the next possible upmove develops, we continue to recommend traders keep to long positions. These were initiated at USD49.78, or the closing level of 8 Jan. For risk-management purposes, a stop-loss can be placed at the breakeven level.

Immediate support is still pegged at USD50.38, which was the low of 14 Jan. This is followed by USD42.36, or the low of 24 Dec 2018. On the other hand, the immediate resistance is set at USD54.55, ie the high of 4 Dec 2018. This is followed by USD57.96, which was the high of 16 Nov 2018.

Source: RHB Securities Research - 29 Jan 2019