A Moment In The Sun For Oil Services

The Oil Services sector ETF ($OIH) has done little over the past 4 years. Since a peak in the summer of 2014 it spent the first 18 months falling to a low at the start of 2016. Losing over 60% of its value, it finally bounced. The bounce was short lived as it topped at the end of 2016 and reversed lower. It retested the prior low into the summer and held.

The chart below shows that since that second low it has moved mainly sideways. Channeling between 23 and 26.50, it made a brief attempt to break higher at the beginning of the year. But the weight of the falling market crashed it back down into the channel. It held in a tight range until two weeks ago. That is when it started higher again. And last week it broke over the top of the channel.

It has held the break out this time as the broad market collapsed though. Will it continue? A push to the upside gives a target on a Measured Move out of the consolidation to about 31. More importantly that would make for a higher high, following a higher low. The start of a reversal higher on a longer scale. Momentum is strong in both the RSI and the MACD. Watch for a move over resistance at 27.45 to trigger the next leg up.

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