CL 1H Challenge
Past challenge from 2026-03-16. See the correct answer and explanation below.
SCENARIO
Crude oil (CL) is at 82.00. It has formed a head and shoulders pattern on the 1H chart over the past 2 days. Left shoulder at 83, head at 84.50, right shoulder at 83. The neckline is at 81.50. Price is currently between the right shoulder and the neckline, showing weakness.
Market Context
OPEC announced no production cuts at their meeting. US shale production hit a new record. Demand forecasts were revised down by the IEA.
Key Levels
Head and shoulders with bearish fundamentals (no OPEC cuts, record US production, lower demand forecasts) is a high-conviction short setup. Wait for the neckline break at 81.50 for confirmation. Place a sell stop at 81.45 with a stop at 83.10 (above the right shoulder). The measured move target is 79.00 (head-to-neckline distance projected down), giving a 1:1.5 R:R.
Prop Firm Implications
CL can be volatile. Use half your normal position size when trading oil patterns to stay within FTMO daily loss limits.