Maintain long positions as rebound is extending. The WTI Crude extended its rebound off 2 Oct’s low of USD36.63 in the latest session, as it added USD1.45 to close at USD40.67. This placed the black gold in the resistance zone that consists of the 50- and 200-day SMA lines. Price actions around this region is critical in signalling the commodity’s next price directional bias. Recall that it was rejected from this area on 1 Oct and experienced a sharp two-day washout session. For now, we are keeping our positive trading bias.

We recommend traders to stay in long positions. We initiated these at USD39.22, the closing level of 5 Oct. To manage risks, a stop-loss can be placed below USD38.00.

Support levels are revised to USD39.00 – near the 50-day SMA line, followed by the USD38.00 round figure. On the upside, the immediate resistance is marked at 18 Sep’s high of USD41.49, followed by USD42.00.

Source: RHB Securities Research - 7 Oct 2020