US Crude Oil futures have progressed in a broadly trending sideways consolidation range between $80 and $88 dollars a barrel for most of November' trading. This has established a long term Head and Shoulders chart pattern on the 240 minute timeframe. Currently the market is positioned mid way between the support and resistance levels of the Head and Shoulders, allowing for a possible breakout in the sessions to come.
The overall Quality of the chart pattern is slightly above average, with a reading of 6 bars. Uniformity and Clarity readings at 5 bars each reflect the significant degree of choppiness in the development due largely to the high volatility. The Initial Trend reading measures 7 bars and traders will be watching for a break of the support near $80.25 a barrel to initiate a sell signal.
Because this chart pattern has taken considerable time to develop, it is possible the market will remain range-bound between the neckline support and shoulder area resistance for a while longer, perhaps forming a Channel Up or Channel Down chart pattern on the shorter time scales. A close above the shoulders would negate the bearish directional bias.
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