Maintain long positions as the bulls are retaining control. The WTI Crude continued to show signs of rebounding off from the 50-day SMA line, which was tested on 30 Jul, in the latest session. The session saw the black gold reach a low and high of USD39.58 and USD41.24, before ending USD0.74 higher at USD41.01. While prices have retraced after hitting a high of USD42.40 on 21 Jul – not too far off from the 200-day SMA line – there is still insufficient evidence to suggest the commodity is due for a deeper correction. Hence, we are keeping our positive trading bias.

We advise traders to stay in long positions, which we initiated at USD41.96 – the closing level of 21 Jul. To manage risks, a stop-loss can be placed below the USD39.83 mark.

The immediate support is pegged at USD39.58 – the latest low. This is followed by USD38.72 – 30 Jul’s low. Moving up, the immediate resistance is eyed at USD41.39, derived from the high of 30 Jul. This is followed by USD42.40, which is the high of 21 Jul.

Source: RHB Securities Research - 4 Aug 2020