Awaiting a Breakout in Oil

I entered oil long at the beginning of the month and it has since been a rather uneventful trade. While technical analysis is often helpful in timing trades, sometimes it does not amount to the expected move in the expected timeframe. I noticed the large uptick in volume in DBO, the oil ETF I am using as a proxy, and bought in expecting a breakout in short order. Yet, oil prices have continued to bounce back and forth in this higher range just basing and creating a base just over the breakout level.

Some potent fundamental news has caused oil prices to stall. This month has seen a report of 10.2% unemployment in the United States causing traders to bet on reduced demand. Last week, oil inventories were reported to be significantly greater than expectations causing selling again. But, oil prices continue to hold this upper range on expectations of future demand outpacing supply supporting prices.

My general thesis is based on the weakening dollar and global economic recovery resulting in higher demand. These fundamental factors are combined with a technical breakout from a 4-month base, a retest and sustained buying interest. Therefore, I am long the DBO ETF against the $27 area and I am looking for a breakout and move to $36, corresponding with a move from $80 to $100 in the price of the underlying futures contracts. I will be adding aggressively through $28.50. The weekly chart is a thing of beauty and I expect a breakout sooner rather than later.