Maintain long positions as bulls may give another breakout attempt. The WTI Crude formed a white candle to settle the latest session USD0.85 stronger at USD54.16. The high was posted at USD54.62, not too far off from the immediate resistance of USD54.84. The commodity has been trying to overcome the said immediate resistance over the past 1.5 weeks. If a breakout happens, we are expecting the commodity to challenge the 200-day SMA line – also our minimum rebound target. Hence, we keep to our positive trading bias.

As the rebound is still showing good signs of extending, and in the absence of a price reversal signal from the said immediate resistance, we maintain our recommendation for traders to stay in long positions. We initiated these at USD53.55, which was the closing level of 10 Oct. For risk-management purposes, a stop loss can be placed below the USD50.00 mark.

Immediate support is expected to emerge at USD50.00, a round figure. This is followed by USD47.78, which was the high of 2 Jan. Towards the upside, the immediate resistance level is set at USD54.84, or the high of 1 Oct. This is followed by USD57.02, ie the high of 25 Sep.

Source: RHB Securities Research - 23 Oct 2019