DXO Revisited - Now Where?

In 2 weeks since I studied the chart of DXO, double long oil ETN, DXO has broken out of the upward-sloping channel to the upside. It ended today at $4.63 during regular hours, and went to $4.70 AH, probably due to the news of a Chevron's facility in Nigeria being bombed.

I have DXO which I accumulated over time, with the average cost of about $2.45 per share. I do have my targets, and one of them has been achieved when it broke that channel upward.

Here's an updated DXO 8-month chart. This ETN is new, so the chart does not go back beyond June 2008. (This ETN was introduced at the height of commodity bubble.) From the short history of this stock, it looks like the next possibility is slightly above $6, a 30% increase from today's price. Since this is a leveraged (double) ETN, the underlying index would need to increase by 15%. Roughly speaking, that would mean the crude oil, currently at around $70, would have to go up to $80.

15% increase in crude oil would also translate to USO, unleveraged oil ETF, to go to $43, where it would meet 200-DMA.

So, $6 target for DXO, or crude oil going to $80 or USO going to $43, seems like a good target for now. The chart shows DXO is in the middle of nowhere right now, having just broken out of the channel. Backtesting is a possibility, and that backtesting could overshoot to the downside. But overall, just like natural gas, I can't picture oil to go back down below $40 again.