Oil broke out yesterday and appears to be setting sights on a new high. Let’s take a look at USO first. It counts best as intermediate-v of major-c of Primary-IV now underway. Even IF this is a abc higher off the February lows, it hasn’t even reached the very common and typical c=a extension at $13.25 yet.. Thus regardless I expect higher prices. Note the black c=1.236x extension targets close to the 2.00x extension (where blue primary label IV is), and also the symmetry break out target (red arrows) points still higher. All in all the charts tell us now to look higher, despite today’s drop.
Similarly for UCO, which also broke out of a symmetrical triangle formation aka Bullflag and adding the length of the prior advance leading into the triangle from where the breakout occured (green arrows) targets nice the ideal target zone for a 5th wave (red box). Hence, there are many lines of evidence pointing the same way. As such the weight of the evidence favors continued upside.
The weekly chart for UCO is also still bullish with all TIs still pointing up, wanting to see higher prices. Once we get those we should get negative divergences, which tell us to start to expect price to turn around.