Maintain long positions as the rebound pattern is still in place. The black gold formed a black candle in the latest session – this was after it came near to the immediate resistance of USD57.96 in the prior sessions. The session’s low and high were recorded at USD55.08 and USD57.53, before ending USD1.78 lower at USD55.48. The negative session near the said immediate resistance is not an encouraging sign, as it suggests price rejection. Further negative price actions are needed to signal that the technical rebound (that started from the low of USD42.36 on 24 Dec 2018) has reached an end. Until we see signs of this, we keep to our positive trading bias.

Until we see clearer signs that the commodity’s rebound phase has indeed ended, we continue to recommend traders maintain long potions. These were initiated at USD49.78, or the closing of 8 Jan. For risk management purposes, a stop-loss can be placed at the breakeven level.

Immediate support is eyed at USD50.38, which was the low of 14 Jan. The second support is at USD42.36, or the low of 24 Dec 2018. Meanwhile, overhead resistance is expected at USD57.96, which was the high of 16 Nov 2018. This is followed by USD60, a round figure.

Source: RHB Securities Research - 26 Feb 2019