Maintain long positions. The WTI Crude extended its counter-trend rebound after a brief pause during the prior session. It added USD1.24 to settle at USD41.19, marginally crossing above the resistance zone which consists of the 50- and 200-day SMA lines. With prices now above the said zone, this signals the commodity’s counter-trend rebound, which set in following 9 Sep’s “Bullish Harami” formation, is still in place. This is further supported by the RSI reading which breaches above the resistance line. We maintain our positive trading bias.

With no price exhaustion signal spotted, we recommend traders 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 at the breakeven level.

Immediate support is revised to USD40.50, followed by USD39.00 – near the 50-day SMA line. On the upside, the immediate resistance is set at 18 Sep’s high of USD41.49, followed by USD42.00.

Source: RHB Securities Research - 9 Oct 2020