The bearish outlook in WTI crude oil continues as price fell to a five-week low last week.
Crashing below the 40.00 level, oil prices closed at 39.60 on Friday. The next key level of interest is at 38.83.
A retest of this support level could offer some rebound. It could also keep oil prices supported above this level while probably forming a sideways range within 39.60 and 41.00.
With the Stochastics signaling an oversold market condition, it adds to the view that the support level at 38.83 will hold for the moment.
In the event that oil prices break down below 38.83, we could expect a move down to the 37.00 handle next.