Maintain long positions as no price rejection signal from the 200-day SMA line. The WTI Crude managed to stage a positive intraday price reversal to settle USD0.24 higher at USD58.01. At one point, it briefly tested the said SMA line with an intraday low of USD57.21. The performance means there is no price rejection signal from the said line – thus the commodity’s rebound leg is still in place. It is worth noting that the commodity’s price actions around the said SMA line are crucial, as it has been struggling to overcome and hold above said SMA line over the recent months. For now, we keep to our positive trading bias.

As the price actions around the 200-day SMA line are still healthy, we recommend traders stay in long positions. We initiated these at USD56.20, or the closing level of 1 Oct. For-risk management purposes, a stop loss can now be placed at the breakeven level.

The immediate support is expected to emerge at USD54.76, which was the low of 20 Nov’s “Bullish Engulfing” formation. This is followed by USD52.39 – or the low of 12 Oct. Towards the upside, the immediate resistance is set at USD59.54, which was the high of 19 Sep. This is followed by USD63.38, ie the high of 16 Sep.

Source: RHB Securities Research - 26 Nov 2019