Last up is Tesoro Petroleum (TSO), a petroleum refiner that hasn't enjoyed the strength of its peers in recent weeks. In fact, this stock looks downright bearish right now, thanks to a textbook topping signal in shares. Here's how to trade it.
TSO is forming a head and shoulders top, a bearish reversal pattern that indicates exhaustion among buyers. The head and shoulders is formed by two swing highs that top out around the same level (the shoulders), separated by a bigger peak called the head; the sell signal comes on the breakdown below the pattern's "neckline" level, which was right at $50. The breakdown happened earlier this month.But traders are getting a second chance for a low-risk entry in a TSO short. That's because this stock pulled back to retest newfound resistance at the neckline. Indeed, there's still plenty of downside room left in this name right now. This is a long-term setup with long-term trading implications. To see this week's trades in action, check out this week's Must-See Charts portfolio on Stockpickr. -- Written by Jonas Elmerraji in Baltimore.
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