Not all of this week's Must-See Charts are showing bullish setups. Quite the opposite is taking place in shares of Columbian oil and gas company Ecopetrol (EC). A bearish head-and-shoulders setup in shares of this $85 billion industrial could accelerate selling in this name.
A head-and-shoulder top is probably one of the most popular technical patterns out there among would-be traders. Simply put, it's formed by two intermediate peaks in a stock's share price (shoulders), with a larger peak in between them (head). Just because it's a common setup doesn't mean its not worth looking at -- a recent study shows that this pattern is both statistically and economically significant for traders.
>>Practice your stock trading strategies and win cash in our stock game.For Ecopetrol to become an actionable short candidate, we'd want to see shares break down below the stock's neckline just below $42.
-- Written by Jonas Elmerraji in Baltimore.
Twitter and become a fan on Facebook. To see this week's trades in action, check out the High Volume Technicals portfolio on Stockpickr.
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