Maintain long positions. The WTI Crude experienced a relatively wide trading range – between USD38.41 and USD40.70 – before closing USD1.31 lower at USD39.29. This was marginally above the USD39.26 immediate support. The weak performance again pushes the black gold back below the 50- and 200-day SMA lines. These lines have been capping the bulls over the past two weeks. Should there be negative price follow-up in the coming sessions, the risk of the commodity retesting the low of the 9 Sep’s “Bullish Harami” formation will be high. Until this happens, we are keeping to our positive trading bias.

We retain our recommendation for traders to stay in long positions. We initiated these at USD40.16, which was the closing level of 16 Sep. To manage risks, a stop-loss can be placed below the USD39.26 level.

We are keeping the immediate support target at USD39.26 – the low of 23 Sep – and followed by USD38.41, which was the latest low. The immediate resistance is revised to USD40.80, ie the high of 28 Sep. This is followed by USD41.49, or the high of 18 Sep.

Source: RHB Securities Research - 30 Sept 2020