Maintain long positions as the overall bias for further rebound is still encouraging. The black gold ended the latest trading session USD1.32 higher at USD53.31 – the low and high were posted at USD51.84 and USD53.93. Still, the positive performance did not alter the overall sideways price pattern that has been developing over the recent three weeks. Towards the upside, a firm breach above the immediate resistance of USD54.55 is required to signal a valid breach above the 50-day SMA line – which, if happens, is likely to suggest the rebound that started from the low of USD42.36 on 24 Dec 2018 is resuming. Based on this, we keep to our positive trading tone.

With the price actions in the recent three weeks suggesting a healthy and relatively narrow sideways consolidation phase is developing, 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 expected at USD50.38, which was the low of 14 Jan. The following support may be found at USD42.36, or the low of 24 Dec 2018. Meanwhile, the immediate resistance is pegged 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 - 30 Jan 2019