Maintain long positions as the consolidation phase is still developing. The WTI Crude formed A “Hammer” candle in yesterday’s session – indicating the commodity managed to reverse most of its intraday losses towards the end of the trading. Session’s low and high were at USD51.23 and USD52.78, before closing USD0.31 lower at USD52.41. Still, the latest performance can be seen as part of the commodity’s sideways consolidation phase – which has been in development around both the immediate resistance of USD54.55 and the 50-day SMA line, over the recent weeks. A deeper retracement may only develop if the immediate support of USD50.38 is breached to the downside. Based on these, we maintain our positive trading tone.

As the price pattern developed over the recent weeks resembles a healthy sideways consolidation – not a price reversal – we continue to recommend traders keep 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.

The immediate support is maintained at USD50.38, which was the low of 14 Jan. The second support may be found at USD42.36, or the low of 24 Dec 2018. Conversely, 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 - 12 Feb 2019