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Oil in Bullish Consolidation
All of the action in the U.S. Oil Fund ETF (NYSE: USO) since the March 26 high has taken the form of a coil that is attached to the Feb-Mar upleg from the 22.74 low. Because the coil has formed within the upper 40% of the major recovery upleg, I consider it a bullish consolidation pattern, which if accurate will mean that it should resolve itself to the upside in a powerful thrust to new recovery highs – above 32.39 (into the 34.00 target zone). At this juncture, only a decline that breaks the integrity of the coil at 28.50 -- and more importantly at 28.32 – will wreck the pattern.
