Crude oil and the energy sector has been in the news quite a bit lately as oil prices have rallied back to $50/barrel.
Today I want to take a look at the Oil Services Sector via the ticker OIH (the VanEck Oil Services Sector ETF) both from a daily and weekly perspective.
Looking at the daily chart we see that OIH made a 50% move from mid January to late April, which makes the current pullback of 8.5% seem only natural. What seems important to take note of is the price level that we are currently above, which is 27.30-27.40 area. This ties in pretty well with both the 50 and 200 DMA and also sits just above trend line support. The important support levels that come into play if the trend line doesn’t hold are 26 and 25 respectively. Also I wanted to highlight that over the past year there’s been a pretty consistent correlation of OIH with $WTIC and the overall market $SPX.
Oil Services Sector (OIH) – Daily Chart
Lastly, I’d like to take a brief look at the weekly chart for OIH, which gives a long term and big picture view of the Oil Services sector ETF. After rallying of the lows in January, OIH was able to close above the 40 week MA for three consecutive weeks, which has been resistance since September 2014, only to give some price back and close below that average last week.
Currently we sit above the 40 week MA which is 27.27, a close above that level would favor the bullish argument for OIH. The next levels of significant resistance should price action continue higher are 30-32. The conclusion is that the near term trend is up and may be potentially developing into a longer term trend. This week’s close should offer important insight. (click chart for larger, clearer image)
Oil Services Sector (OIH) – Weekly Chart
Thanks for reading and have a great rest of your week!
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The author has a position in mentioned securities at the time of publication. Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.