Maintain long positions, as the bulls are keeping prices above the 50-day SMA line. The WTI Crude experienced a wide trading range during its latest session. The low and high were recorded at USD39.22 (to test the USD40.00 and USD39.22 support levels) and USD41.29 before it closed mildly lower by USD0.08 to USD40.96. Despite the volatile performance, the bulls were still showing control towards the end of the session and managed to maintain prices above the 50-day SMA line. We are still expecting the USD41.49 resistance to be tested or crossed before looking for possible price reversal signals to mark an end to the ongoing multi-week counter-trend rebound, which started from 9 Sep’s “Bullish Harami” formation. 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, or the closing level of 5 Oct. To manage risks, a stop-loss can be placed below the USD40.00 mark.

The immediate support is revised to the USD40.00 round figure and followed by USD39.22. Conversely, the immediate resistance is now eyed at 18 Sep’s high of USD41.49 and followed by the USD42.00 level.

Source: RHB Securities Research - 16 Oct 2020