Oil has been selling for two weeks now and it seems prudent to expect a bounce. Taking a look at the oil services sector you can see OIH is in a downwards channel in the intermediate term but the longer term uptrend remains in tact. Yesterday OIH touched it's 200 dma, rising trend line and the lower end of the down channel. Volume was the highest it has been in six months so there seems to have been some degree of capitulation. In the least I would expect OIH to head back up to the upper end of the channel where the 50 dma lies at around $210. We'll just have to wait and see if OIH can do anything more but its a bad sign that the 50 dma acted as resistance twice recently and is now declining.
Friday, July 25, 2008
OIH Swing Trade
Oil has been selling for two weeks now and it seems prudent to expect a bounce. Taking a look at the oil services sector you can see OIH is in a downwards channel in the intermediate term but the longer term uptrend remains in tact. Yesterday OIH touched it's 200 dma, rising trend line and the lower end of the down channel. Volume was the highest it has been in six months so there seems to have been some degree of capitulation. In the least I would expect OIH to head back up to the upper end of the channel where the 50 dma lies at around $210. We'll just have to wait and see if OIH can do anything more but its a bad sign that the 50 dma acted as resistance twice recently and is now declining.
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