Royal Dutch Shell

Last up is oil and gas giant Royal Dutch Shell ( RDS.B). RDS is the longest-term of all of the stocks that we're looking at today -- shares have been forming their pattern since the start of the year. But don't forget: Long-term charts also have longer-term upside implications for traders.

RDS is forming an inverse head and shoulders pattern, a bullish setup that's formed by three swing lows: two at around the same level (the shoulders) that are separated by a deeper one (the head). The buy signal comes when the neckline, the resistance level connecting all three lows, gets broken. Right now, shares are sitting just below RDS' sloping neckline.

Lest you think that the head and shoulders is too well known to be worth trading, the research suggests otherwise: a recent academic study conducted by the Federal Reserve Board of New York found that the results of 10,000 computer-simulated head-and-shoulders trades resulted in "profits that would have been both statistically and economically significant."

I'd recommend being a buyer RDS after shares push above that slanted blue line...

To see this week's trades in action, check out the Technical Setups for the Week portfolio on Stockpickr.

-- Written by Jonas Elmerraji in Baltimore.


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At the time of publication, author had no positions in stocks mentioned.

Jonas Elmerraji is the editor and portfolio manager of the Rhino Stock Report, a free investment advisory that returned 15% in 2008. He is a contributor to numerous financial outlets, including Forbes and Investopedia, and has been featured in Investor's Business Daily, in Consumer's Digest and on

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