Moving closer towards the 200-day SMA line; maintain long positions. The WTI Crude ended the latest session higher by USD0.26 at USD56.23. Trading took place between USD55.41 and USD56.51. The positive closing placed the commodity closer towards testing the 200-day SMA line. Price actions in the coming sessions are critical, as an emergence of a price rejection signal from the said SMA line could signal that the countertrend rebound has reached its peak. Recall that the commodity has been struggling to cross and hold above this SMA line over the past several months. For now, we keep to our positive trading bias.

Given that we are still expecting the rebound to at least to test the 200-day SMA line, we stay with our call for traders to remain in long positions. We initiated these at USD53.55, which was the closing level of 10 Oct. For riskmanagement purposes, a stop loss can now be placed at the breakeven point.

Immediate support is set at USD52.39, or the low of 12 Oct. This is followed by USD50.00, a round figure. Moving up, the immediate resistance level is now expected at USD57.02, ie the high of 25 Sep. This is followed by USD59.54, which was the high of 19 Sep.

Source: RHB Securities Research - 29 Oct 2019