This Pennant chart pattern has very clearly defined support and resistance levels with a wide inside range to trade until a directional breakout occurs. The pattern's Initial Trend reading ranks a full 10 bars, with the overall quality of scoring 7 bars after the successful retest of support at the $99.00 per barrel level. This bodes well for a bounce back to the resistance offered near $102.50 per barrel.

A breach of the Wednesday low would violate the support level and trigger a breakout signal for a move lower. Meanwhile, the anticipated resumption of range-bound trading inside the pennant provides a $3 window for short-term swing trading, with stop-loss orders placed outside the pattern's trend line boundaries. A rally above the $103.00 per barrel level is needed to initiate a breakout to the upside. .

For further information on this and other Autochartist products, visit our website at www.autochartist.com