Initiate long positions on likely uptrend extension. The WTI Crude experienced a positive follow-through from the prior session’s sharp positive intraday price reversal. It ended USD0.63 stronger at USD47.62, with the high posted at USD47.73. The closing level placed the commodity slightly above the previous immediate resistance of USD47.57, signalling – in our view – that the bulls are having firm control over the WTI Crude’s uptrend. This has also nullified our previous expectations of the commodity experiencing a deeper correction phase. While the RSI is now overbought, price actions are still indicating uptrend extensions as still likely the case. We switch our trading bias from negative to positive.

Our previous short positions – initiated at USD44.55, or the closing level of 1 Dec – were closed out at USD47.57 during the latest session. Concurrently, we initiate long positions. To manage risks, a stop-loss can be placed below the USD46.50 threshold.

The immediate support is revised to USD46.50 near the latest low and followed by USD45.69. Conversely, the immediate resistance is now pegged at USD48.66, or the high of 3 Mar, and followed by the USD50.00 round figure.

Source: RHB Securities Research - 16 Dec 2020