Oil is Likely Forming a Megaphone Right Shoulder on H&S Top for Blue Rising Megaphone
Crude oil is working on a megaphone (orange) within a likely larger bottoming megaphone. Right now it’s trying to decide exactly where to top for this wave up within the orange megaphone.
It would typically take three tries to draw the top. That would usually mean another new high.
Oil would also usually put a head and shoulders top on its blue rising megaphone. It has a potential H&S top drawn, but the formation didn’t take the price sufficiently sideways before reaching the blue rising megaphone bottom. That is consistent with a right shoulder megaphone before another new high as well.
After completing a top up here, oil must retrace to at least the orange megaphone VWAP and blue rising megaphone bottom. If the price starts to megaphone there, oil is likely forming a triangle before a lower low.
Oil could also plunge straight to the orange megaphone bottom to put in a lower low.