Reversal Crude Oil Trading Chart Patterns: Head and Shoulders and Reverse Head Shoulders
Head and shoulders Crude Oil Trading Chart Pattern
This is a reversal crude oil trading pattern that forms after an extended Oil Trading upward crude oil trend. It's made up of three consecutive peaks, left shoulder, head and the right shoulder with 2 moderate troughs between the shoulders.
This oil pattern is considered complete once crude crude crude oil price penetrates and moves below the neckline, which is drawn by joining the two troughs in between the shoulders chart pattern.
To go short, Oil traders place their sell stop crude oil trade orders just below neckline.
Summary:
- This Oil Trading pattern forms after an extended move upwards
- This formation indicates that there will be a reversal in the crude oil trading market
- This formation resembles head with shoulders thus its name.
- To draw the neck-line we use chart point 1 & point 2 as displayed below. We also extend this line in both directions.
- We sell when crude crude oil price breaks below the neckline point: see the trading chart below for explanation.
Or the head and shoulders can also form on a slanting neck line, like the oil example shown below:
Example of Head & Shoulders Pattern on a Oil Trading Chart
Head & Shoulders Pattern
This oil chart pattern can also be formed on a slanting neck line, like the one above, the neck line doesn't have to be necessarily horizontal.
Reverse Head & Shoulders Crude Oil Trading Pattern
This is a reversal head and shoulders pattern that forms after an extended Oil Trading downward oil trend. It resembles an upside-down head shoulders.
This oil pattern is considered complete once crude crude oil price penetrates above the neckline, which is drawn by connecting these two peaks between the reverse shoulders chart pattern.
To go long buyers place their buy stop crude oil trade orders just above the neckline.
Summary:
- This Oil Trading pattern forms after an extended move downwards
- This formation indicates that there will be a reversal in the crude oil trading market
- This formation resembles is upside-down, thus the name Reverse.
- We buy when crude crude oil price breaks above the neckline point: see the trading chart below for explanation.
Examples of Reverse Head and Shoulders Pattern on a Oil Trading Chart
Examples of Reverse Head and Shoulders Pattern
