Maintain long positions until signals for a deeper correction appear. Following multiple failed attempts to cross the USD43.52 resistance in recent sessions, the WTI Crude ended USD1.25 lower at USD41.51. This tests a confluence of support levels, which comprise the 50- and 200-day SMA lines, as well as the USD41.50 immediate support. Looking at the price pattern developing over the recent weeks, the commodity is still trading within a sideways trading zone. This bias should stay, provided the abovementioned support levels are not breached. We maintain our positive trading bias.

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

The immediate support is maintained at USD41.50, which was near the lows of 11 and 12 Aug. This is followed by the USD40.00 round figure. Moving up, the immediate resistance is set at USD43.52, which was derived from 5 Aug’s high – this is followed by the USD45.00 mark.

Source: RHB Securities Research - 3 Sept 2020