iPath S&P Goldman Sachs Crude Oil TR Idx ETN (OIL) has broken out of a large (8 month) Symmetrical Triangle as it continues to come off the bottom. OIL has been lagging the general market and now seems poised for a run with a likely target of $33.07, 21% above Thursday’s closing price.

OIL ETN Weekly Chart – Symmetrical Triangle Breakout

Last week OIL broke out of the triangle and closed above the swing high of $27.22 from January, a confirmation of strength. In addition, the significance of the breakout was strengthened by the fact that it confirmed a move through the 50 period exponential moving average (ema) on the Weekly chart, the 200ema on a Daily chart, and the 23.6% Fibonacci retracement of the shorter downtrend measured from the swing high in September ‘08.

OIL ETN Daily Chart

OIL is now above its Weekly 50ema for the first time since September ’08 and its Daily 200ema.

The next resistance zone of significance is from $31.39 to $34.70. This zone consists of previous support levels from 2007, which are noted on the Weekly chart with blue arrows, the 23.6% Fibonacci retracement level ($34.11) of the large downtrend measured from the July ’08 high, and the 38.2% Fibonacci level ($31.91) when measured from the September ’08 swing high.

Measuring Objective of Symmetrical Triangle:
27.76 (top of triangle) less 21.40 (bottom of triangle) = 6.36 difference, added to the breakout price of 26.71 give a minimum target of $33.07.

The $33.07 triangle target is right in the middle of the resistance zone from $31.39 to $34.70.

– Will look for entry on retracement.