Maintain long positions. The WTI Crude extended its positive performance after experiencing a minor pause during the lower timeframe between Thursday and Friday’s second and first halves. The black gold moved from an intraday low of USD48.10 to a high of USD49.28 before ending USD0.74 stronger at USD49.10. This signals the bulls’ firm control over the multi-week sharp upward trend. However, with prices now getting closer to the USD50.00 psychological mark on a higher overbought RSI reading of 75.4, the risk of profit-taking activities setting in has also increased. However, until weakness signs appear, we keep to our positive trading bias.

We recommend traders stay in long positions. We initiated these at USD47.62, which was the closing level of 15 Dec. To manage risks, a stop-loss can now be placed at the breakeven point.

The immediate support is revised to USD48.20 and followed by USD47.20. On the upside, the immediate resistance is now pegged at the USD50.00 round figure and followed by USD52.00, ie near the high of 25 Feb.

Source: RHB Securities Research - 21 Dec 2020