Maintain long positions as the bulls push prices towards the 200-day SMA line again. The WTI Crude ended the latest session on a high note, adding USD1.90 to end at USD57.11. This was after it reached a low and high of USD54.76 and USD57.25. The positive closing also placed the commodity near the 200-day SMA line again. Consequently, a “Bullish Engulfing’ formation appeared. The positive session suggests there was no negative follow-up from the prior session‘s sharp decline – thus the risk for a price rejection from the said SMA line is still contained for now. As such, we are keeping our positive trading tone.

As the commodity is again back to the vicinity of testing the said important SMA line, we recommend traders 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.

We are keeping the immediate support set at USD52.39, or the low of 12 Oct. This is followed by USD50.00, a round figure. On the other hand, the immediate resistance is set at USD59.54, which was the high of 19 Sep. This is followed by USD63.38, the high of 16 Sep.

Source: RHB Securities Research - 21 Nov 2019