Maintain long positions are the bulls are testing the 200-day SMA line. The WTI Crude ended the latest trade USD0.34 higher at USD56.54. At one point, it reached a high of USD57.43 to test both the 200-day SMA line and the immediate resistance of USD57.02. While the bulls were unable to hold on to most of the intraday gains and failed to settle above the said SMA line, there is no negative price signal that could indicate potential price rejection yet. Recall that the said SMA line is a level that the bulls have struggled to overcome and hold above over the recent months. Maintain our positive trading bias.

As chances are still high for the rebound to extend further, we recommend traders to stay in long positions. We initiated these at USD56.20, the closing level of 1 Oct. For risk management purposes, a stop loss can be placed below USD52.39.

Immediate support is expected to emerge at USD52.39, or the low of 12 Oct. This is followed by USD50.00, a round figure. Moving up, the immediate resistance is set 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 - 5 Nov 2019