Only 10 years ago, crude oil prices were trading around $13 a barrel, which is a shocking contrast to the $147 per barrel peak the market hit in July 2008.    

This 11 times increase in price over a decade represented an outrageous opportunity for investors in energy stocks. 

Indeed, an individual investor who properly recognized the candlestick price formations that occurred on individual energy-related stocks would have produced profits of an unprecedented nature. 

In moving forward, properly recognizing these types of patterns offers the possibility to obtain returns far greater than market averages.

The candlestick patterns that predicted oil’s run

Throughout this decade long run-up of prices in oil, there has been several clearly identifiable candlestick pattern formations, which would have allowed an individual to identify optimum points of entry and exit into the stocks of companies, such as Exxon, to maximize investment returns. 

These candlestick patterns would not only have benefited investors to profit from the decade long bull run in the stocks, but they could have also enabled them to recognize short-term correction periods to maximize total return even further.

By looking at historical candlestick price charts of the energy sector companies, one can repetitively notice the formations of patterns, such as the one known as a Morning Star.

Everyone who is familiar with candlestick formation analysis recognizes that this pattern represents a signal that prices will appreciate significantly.  Investors, who are well-versed in candlestick recognition techniques, know that the Morning Star formation represents an opportunity to initiate a long position. 

Through the proper recognition of candlestick patterns, any individual investor can greatly increase his return on capital.

From the Morning Star to the Hangman

These patterns aid an individual to recognize the occurrence of highly probabilistic events. 

Clearly, over the last several years, bullish candlestick formations appeared on a continual basis for historical price charts of energy sector companies. 

Not only has this allowed astute investors using candlestick techniques to benefit from the upward movement of prices, recognition of bearish correction candlestick formations during the overall uptrend has allowed these types of traders to also benefit from the intermittent corrections. 

As even in a bull trending market, candlestick formations, such as a Hangman, appear, signaling the proper time to exit profitable positions and consider reversing the trade.

An examination of the candlestick historical charts for the stocks in the energy sector revealed and confirmed that this industry group was in a bull market over the last decade. 

The candlestick patterns demonstrated that these firms were aligned for a significant stock run-up. 

The recognition of candlestick patterns and their ability to predict likely market moves allows any person who has mastered the techniques associated with their formation to dramatically improve investing results, both on the long-term and short-term basis. 

An individual who has mastered these techniques through study and practice can utilize tools, such as candlestick formations, to benefit not only from underlying long-term trends as has occurred in the energy sector, but also the various short term corrections that will always occur.