Maintain long positions. The WTI Crude retreated below the 50-day average line during the last trading session of 2021 – settling USD1.78 weaker at USD75.21 amid strong selling interest. The black gold opened at USD76.66 and then attempted to move higher to hit the day’s high of USD77.08. However, strong profit taking dragged it to reach the day’s low of USD74.95 before the close. Note that the commodity hit 2021’s peak at USD85.41 on 25 Oct before correcting to USD62.43 on 2 Dec. It then bounced off strongly and climbed above the 200-day SMA line in Dec 2021 – suggesting in a longer time frame, the uptrend remains intact. For the immediate session, we expect the commodity to pull back mildly for consolidation before retesting the overhead resistance or the 50-day SMA line. Until the initital stop-loss is triggered, we keep to our positive trading bias.

Traders are advised to keep to the long positions inititated at the closing level of 23 Dec, ie USD73.79. To manage the downside risks, the initial stop-loss threshold is set at the USD72.93 support.

The immediate support is set at USD74.76 – 22 Nov’s low – and USD72.93, or 29 Nov’s high. The nearest resistance is fixed at USD79.23 – 24 Nov’s high – followed by USD81.81, ie 16 Nov’s high

Source: RHB Securities Research - 3 Jan 2022