May Crude Oil Sees Potential Head-and-Shoulders Top Reversal

May2011-crude.gifCrude oil futures for May delivery on the New York Mercantile Exchange are seeing some downside price pressure early this week, which has raised the specter of a bearish head-and-shoulders top reversal pattern forming on the daily bar chart. The February high of $104.95 is the left shoulder of the chart pattern, while the March 7 high of $108.25 is the head, and last week’s high of $106.69 is the right shoulder of the chart pattern. It would take a push below the “neckline” of this head-and-shoulders top reversal pattern–located at the March low of $97.02–to confirm it. If confirmed, the downside price objective from this particular pattern would be the $88.00 area. Any near-term price strength in May crude oil futures that pushes prices back above last week’s high of $106.69 would negate the head-and-shoulders top pattern and would provide the bulls with fresh upside near-term technical momentum. Near-term technical support for May crude oil futures is located at Tuesday’s low of $102.70, at $102.00 and then at $101.00. Major psychological support is located at the $100.00 level. On the upside, near-term chart resistance is located at Tuesday’s high of $104.00, at $105.00 and then at Monday’s high of $105.76. Stay tuned!–Jim Wyckoff

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One Response to May Crude Oil Sees Potential Head-and-Shoulders Top Reversal

  1. carletondixon June 2, 2011 at 12:48 am #

    Pretty much agree with this post.But,What will be the market value of crude oil in june?Will it rise or not?Most of the commodity trader keep an eye on oil market before trading.Oil price also afect the other commodity.
    Currency Trading

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