A very similar setup is taking place in shares of Statoil ( STO). That shouldn't come as a huge surprise -- after all, both companies are in the oil business, so they're expected to be highly correlated with one another.

So where's the actionable price on this setup?

In Statoil's case, the resistance level to watch is $27. That's the price level that's acted as a sort of ceiling for shares the past three times STO attempted to break higher. Resistance levels, like the ones in Statoil and ConocoPhillips, exist because there's a glut of supply of shares above that price (think of it as a level where an abundance of sellers are willing to sell). When buyers attempt to bid shares higher, their buying gets completely overwhelmed by sellers' attempts to take gains (or enter shorts), and prices reverse.

That's why a breakout above $27 would be such a compelling buy signal. It would indicate that buyers have absorbed the glut of supply in full. Don't pay too much attention to the gaps in STO -- they're suspension gaps caused by the off-hours trading of STO shares on the Oslo Stock Exchange. From a technical perspective, they don't impact the trading implications of this stock.

Statoil is another of TheStreet Ratings' top-rated oil and gas stocks, with a B buy rating, and it shows up on a list of 7 U.S. Stock Picks From Addison Capital.

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