Maintain long positons. The WTI staged a positive price follow-through during its latest session after breaking out from its minor consolidation phase in the session before. After reaching a low of USD49.48 earlier in the session, the commodity trended higher for the remainder of the session, hitting a high of USD50.94 before closing USD0.70 higher at USD50.63 – crossing above the USD50.00 psychological level.Note: The RSI has crossed above the resistance line and is trending higher, with the current reading of 67.9 indicating that recent gains have yet to reach the overbought threshold. Hence, we are keeping to our positive trading bias.

As the trend continues to play out, we recommend traders stay in long positions. We initiated these at USD49.93, or the closing level of 5 Jan. To manage risks, a stop loss can be placed below the USD47.18 mark.

We are now expect support levels at USD49.50 – near the latest low – and USD48.50. On the upside, the immediate resistance is now set at USD52.00 and followed by USD54.00.

Source: RHB Securities Research - 7 Jan 2021