Maintain long positions while keeping the risk management tight. The WTI Crude failed to sustain its intraday gains. At the closing, it weakened USD0.85 to settle at USD55.81 – session’s low and high were posted at USD55.58 and USD56.92. The negative performance set in after the commodity came in near to test both the 200- day SMA line (also our minimum rebound target) and the immediate resistance of USD57.02 during the session. Price actions over the coming sessions are important, as a price reversal signal could mean the rebound that started from an area near the USD50 support level could have reached its peak. Until signs of this appear, we are keeping our positive trading bias.

In the absence of a price reversal signal, 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 risk-management purposes, a stop loss can now be placed at USD55.58, the latest session’s low.

Immediate support is expected at USD52.39, or the low of 12 Oct. This is followed by USD50.00, a round figure. Conversely, the immediate resistance is pegged 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