Oil Price Analysis: WTI has taken a dive but cruitally holds above $40.00 per barrel

• WTI is trading 2.8% lower as sentiment takes a turn for the worse on Thursday.
• The bears attacked USD 39.00 per barrel but the bulls stepped in. 

WTI 4-hour chart

WTI has pulled away from its best levels on Thursday as sentiment turns to the downside. In the major bourses, some of the major oil names are underperforming as their updates paint a bleak picture. Interestingly job cuts and CAPEX reductions could lead to less supply in the market so long term this could be bullish for the WTI price. 

Looking closer at the chart below, the price failed to break the top of the pattern where the black downward sloping trendline lies. On the downside, the upward sloping trendline has now been broken but the market found some support just ahead of the USD 39.00 per barrel level. Now this zone marked in red is very important as a break could mean the price is heading to lower levels.

The indicators are both looking very bearish now. The Relative Strength Index has moved into oversold territory hitting the 30 area. The MACD histogram is now firmly in the red and the signal lines are separating under the mid-level. 

Overall, on the higher timeframes, the trend is still bullish. This could be a point where a lower high lower low pattern may start to form. A break of the aforementioned USD 39 per barrel level is the one to look out for if your bias is bearish. 

Additional levels