ETF Trends
ETF Trends

On another downbeat day for U.S. stocks, just 19 exchange traded funds are hitting new all-time highs on Thursday.

However, in confirmation of the energy sector’s ongoing strength, nine of the 19 ETFs at all-time highs today are energy funds. That group of nine includes standard fare focused on the largest integrated oil names, ETFs with an emphasis on exploration and production companies as well as unconventional fare. [Takeover Rumor Lifts This Oil ETF]

Oil services ETFs are not making new all-time highs, but funds such as the Market Vectors Oil Service ETF (NYSEArca: OIH), the largest oil services ETF, and the iShares U.S. Oil Equipment & Services ETF (NYSEArca: IEZ) merit consideration with oil prices rising.

“We feel we have not heard enough about Oil based ETPs lately given the daily headlines now surrounding rising tensions in Iraq and the overthrow of key cities by an Al-Qaeda splinter group,” said Street One Financial Vice President Paul Weisbruch in a note out Thursday. “If tensions in the Mideast remain heightened, and furthermore as we approach the Labor Day driving season several months out, there is no reason to believe that activity in Crude Oil linked ETPs will remain dormant as it largely is right now.” [Chart of the Day: Unloved Oil]

Amid a spate of positive earnings reports, upward EPS revisions and dividend increases, oil services ETFs have stellar performers in recent months. Over the past 90 days, OIH ranks as the fifth-best non-leveraged sector or industry ETF. IEZ is sixth. [Good Vibes for Oil ETFs]

Do not forget the SPDR Oil & Gas Equipment & Services ETF (NYSEArca: XES). The equal weight offering, which like OIH, hit a new 52-week today. XES is up 10.3% over the past 90 days.

“It may be time for the Oil Servicing names to take the lead and drive higher against Oil itself again. When I look at the weekly chart of the ratio of the two ETF’s that measure OIH and the United States Oil Fund (NYSEArca: USO) below it has positive signs for this development,” notes Greg Harmon of Dragonfly Capital.

“The symmetrical triangle that it is currently trading in is not one of them. But should it break the triangle to the upside it would carry a target of 1.80 on the ratio. That is a big move. The signs that suggest you watch it closely come from a close examination of the candles themselves. The AB=CD pattern tracing out suggests a continuation to 1.65 at least and a 138.2% extension of the AB leg would take it near the 1.80 target. The price action since the ‘C’ point is also positive with a series of higher highs and higher lows. And the momentum indicators RSI and MACD are both positives and rising.”

OIH/USO Weekly Ratio Chart

Chart Courtesy: Dragonfly Capital