Maintain long positions. The WTI Crude settled the latest session USD0.77 higher at USD40.20, crossing above the previous USD40.00 resistance point. The positive closing continues to place the commodity within the zone that that consists of the 50- and 200-day SMA lines. It also suggests that there was no negative follow-through from the previous two sessions’ declines. Towards the downside, if our ongoing USD39.22 long positions’ trailing-stop is breached at the closing of coming sessions, this should confirm a price rejection from the said zone – and could open the doors for a deeper price retracement. For now, we are keeping our positive trading bias.

With no price exhaustion signal spotted, we recommend traders stay in long positions. We initiated these at USD39.22, or the closing level of 5 Oct. To manage risks, a stop-loss can be placed at the breakeven level.

The immediate support is revised to USD39.22. This is followed by USD38.40, a price point of 2 and 5 Oct. Meanwhile the immediate resistance is now eyed at 18 Sep’s high of USD41.49, followed USD42.00.

Source: RHB Securities Research - 14 Oct 2020