Crude oil 4H Symetrical triangle, breakout of a down channel
On this 4H chart for Crude oil you can notice that the price has been moving in a very obvious down trend channel for a while. Recently the price broke out of it and started consolidating above the down tren resistance ( now a support ). In the proces the price formed a symetrical triangle. It is important to observe this triangle in the following hours as it can provide a breakout.
Usually, when having a symetriacal triangle, it's better for the pattern to break in the direction of the movement that lead into it. If you observe the first green line, you will notice that this was an increase. If the pattern produces a Buy entry, this will also align with the breakout from this down trend channel.
If the price starts increasing, it can encounter the first resistance around 75.80 - 76, this is the current major high point. If the price manages to surpass it, this will create a new bullish market structure and it can set the for a new bullish trend.
The price can also correct from it. If it does, it can retrace to around 73 - 74 before getting the chance to bounce to the up side again.
The development in the following days will be important not only for this setup, but possibly for the next 2 - 3 weeks. If the price breaks above the 76, the new bullish market structure can send it on an up trend. If the price breaks bellow the triangle and it goes back in the channel, then it can continue on a down trend.
Usually, when having a symetriacal triangle, it's better for the pattern to break in the direction of the movement that lead into it. If you observe the first green line, you will notice that this was an increase. If the pattern produces a Buy entry, this will also align with the breakout from this down trend channel.
If the price starts increasing, it can encounter the first resistance around 75.80 - 76, this is the current major high point. If the price manages to surpass it, this will create a new bullish market structure and it can set the for a new bullish trend.
The price can also correct from it. If it does, it can retrace to around 73 - 74 before getting the chance to bounce to the up side again.
The development in the following days will be important not only for this setup, but possibly for the next 2 - 3 weeks. If the price breaks above the 76, the new bullish market structure can send it on an up trend. If the price breaks bellow the triangle and it goes back in the channel, then it can continue on a down trend.
Trade active:
The price produced a breakout to the up side. This is considered as an entry signal from the Symetrical triangle pattern itself. Let's see how it goes..
Comment:
Price went up close to the red resistance range ( first target ) and now it corrected to the symmetrical traingle resistance. This is a retest of the pattern. The development on this retest is important for the further development and also a potential entry point for traders that missed the breakout
Comment:
After the initial breakout, price corrected to retest the structure. It within the pattern and tested the support line. Now it's showing some rejection. Monitor if it will break above the resistance again. If it closes a candle effectively above it, this can be used as an entry
Trade closed: target reached:
Trade went absolutely as expected. Congratulations to everyone who managed to benefit from this setup!
