Initiate long positions. The WTI Crude experienced a strong session as it swung from a low of USD42.82 to a high of USD45.20, before closing USD1.85 higher at USD44.91. The positive closing means the commodity broke away from its multi-month correction phase, which started from August and saw the commodity reach a low of USD33.64 on 2 Nov. By extension, this positive price signal has also nullified our previous forecast for the commodity to trade in an extended multi-month correction phase. With prices firmly above both the 50- and 200- day SMA lines, coupled with the RSI which managed to decisively cross above the resistance line, we switch our trading bias from negative to positive.

Our previous short positions initiated at USD40.13, or the closing level of 13 Nov, were closed out at USD43.78 in the latest session. Concurrently, we initiate long positions. To manage risks, a stop-loss can be placed below USD42.50.

Support levels are revised to USD43.50 and USD42.50. On the upside, the immediate resistance is expected at USD45.00, and followed by USD47.57 – the high of 5 Mar.

Source: RHB Securities Research - 25 Nov 2020