Maintain long positions. The WTI Crude traded in a relatively narrow band between USD42.33 and USD42.89 before closing USD0.28 higher at USD42.62. The latest performance was part of the commodity’s sideways trading range around the 200-day SMA line, which has been in development over the past three weeks. Towards the downside, the signal for a trend reversal from said SMA line should only be triggered if the USD41.50 support level is breached. For now, we stay with our positive trading bias.

We advise traders to remain in long positions, which we initiated at the USD41.96 mark, or the closing level of 21 Jul. To manage risks, a stop-loss can now be placed below the USD41.50 mark.

The immediate support stays at USD41.50, which is near the lows of 11 and 12 Aug. This is followed by the USD40.00 round figure. Towards the upside, the immediate resistance is set at USD42.95, ie near the highs of 11 and 12 Aug. This is followed by USD43.52, which was derived from 5 Aug’s high.

Source: RHB Securities Research - 25 Aug 2020