As we noted to subscribers last Thursday, classic Bollinger Band oil price behavior 99.9% of the time reverses from a puncture of either side of the band. Today's decline in crude oil and its ETF the US Oil Fund (AMEX: USO) confirms a near-term peak last week against the top Bollinger Band line, as well as the initiation of a corrective period that has an initial target zone of $137.75 along the sharply rising DMA. A sustained break of $137.75 should trigger additional weakness that points to a test of critical support at $132.00.
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