WTI Crude Oil Price Enters Bearish Territory with Head and Shoulders Pattern

The WTI crude oil price appears to be forming a head and shoulders pattern on its daily chart, which could signal an end to the recent rally that took prices from the low $70s to near $88.

The left shoulder formed in mid-to-late July, while the head printed shortly after at around $87.80. The right shoulder has now completed just below $85, with each peak lower than the last to reflect fading bullish momentum.

A confirmed break and close below the neckline, which runs along the shaded support zone around $80.00, would validate the pattern and open the door to a measured move selloff.

The target for this potential decline could be around $72.00, obtained by subtracting the head-to-neckline distance from the breakdown point. Meanwhile, the moving average front confirms that the path of least resistance has shifted to the downside, with the 100 SMA having crossed below the 200 SMA.