Oil is Working its Way Up a Price Channel on the 5-Minute Chart
Oil is working its way up a confirmed price channel on the 5-minute chart. In the channel’s critical decision wave, oil returned to the channel bottom instead of breaking out into a melt-up.
That means oil has either started forming a top and is in the middle wave of it, or will put in the first wave of a topping pattern after the next move to the channel bottom.
I’ve drawn a megaphone top on the channel, but the top could also form a rising wedge or rising megaphone or H&S. Occasionally the top will even be a triangle that breaks out downwards.
Oil is Likely Forming Either an Inverse H&S with a Triangle Right Shoulder or a Triangle
Oil is forming either an inverse head and shoulders or a triangle on the daily and weekly charts. If it’s forming an inverse H&S, it will probably form a triangle right shoulder before breaking out with a target of 80.
If oil can drop lower into the end of the year to a retest of the January low, it is likely forming a triangle before a final collapse to the 10-15 area. That would put a larger inverse H&S on the chart with a target closer to 100.