Maintain long positions. The WTI Crude gave back its previous session’s gains, shedding USD1.21 to settle at USD52.36 after rebounding off the USD51.83 low. The negative session was in line with our expectation that the black gold is, at the minimum, developing a relatively narrow consolidation phase after its recent upward move touched the USD54.00-55.00 resistance zone on the back of an overbought RSI reading. Towards the downside, if the USD50.00 psychological level is breached, this ongoing correction phase may turn into a deeper retracement. For now, we are keeping to our positive trading bias.

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 at the breakeven level.

The immediate support is maintained at USD52.24 – the low of 14 Jan – and followed by USD51.50. On the upside, the immediate resistance is maintained at USD54.00 and followed by the USD55.00 threshold.

Source: RHB Securities Research - 18 Jan 2021