Maintain long positions. The WTI Crude closed marginally above the 50-day SMA at USD40.64 – indicating a gain of USD0.61. This implies there is no negative price follow-through from the prior session’s weak performance which saw the commodity fall below the said SMA line, after it met our expectations for it to retest the USD41.49 resistance point on 20 Oct. Based on the recent sessions’ price actions, we still believe – provided the USD40.00 support level does not fail at the closing – the multi-week counter-trend rebound that started from 9 Sep’s “Bullish Harami” would still be deemed as intact. Maintain our positive trading bias.

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 set at the USD40.00 round figure, followed by the USD39.22 mark. Meanwhile, the immediate resistance is set at USD41.00, followed by 18 Sep’s high of USD41.49

Source: RHB Securities Research - 23 Oct 2020