- WTI witnessed some heavy selling for the second consecutive session on Thursday.
- Oversold conditions on hourly charts helped ease the bearish pressure, for now.
- The set-up supports prospects for additional weakness toward the $39.00 figure.
WTI crude oil prices added to the previous day’s heavy losses and remained under some intense selling pressure for the second consecutive session on Thursday. The commodity dived to near one-month lows, albeit managed to find some support near the $40.45 region.
The comes on the back of the overnight breakthrough a multi-week-old trading range, which constituted the formation of a rectangle on short-term charts. A subsequent slide below the very important 200-day SMA might have already shifted the near-term bias in favour of bearish traders.
The negative outlook is further reinforced by the fact that technical indicators on the daily chart have just started drifting in the bearish territory. However, oscillators on hourly charts are already flashing oversold conditions, warranting some consolidation or a modest bounce.
This makes it prudent to wait for some strong follow-through selling before positioning for any further weakness. The commodity might then accelerate the slide towards the key $40.00 psychological mark en-route the $39.45-40 support before eventually dropping to the $39.00 mark.
On the flip side, any meaningful recovery attempt might now confront a stiff resistance and remain capped near the rectangle support breakpoint, around the $41.00 round-figure.
WTI daily chart
Technical levels to watch