OIH recently reclaimed its 20- and 50-day moving averages and now rests an average of 5.1% above those lines. However, the ETF has a long way to run to reclaim its 200-day line. Even with its recent pop, OIH needs to gain another 16.8% to get back to its 200-day moving average, a line the ETF has not closed above since September. [Hits Keep Coming for Oil Services ETFs]
“OIH is also well below overbought levels and has plenty of room to run. The first big challenge will be the multi-week highs of February just below $37. Once through this area, which may require a bit of back-and-fill trading first, the OIH could get a nice boost. I believe this run could result in a gap fill move up to the $41 area. This is the site of a massive breakdown gap left behind on Nov. 21,” adds Morrow.
OIH’s fortunes will continue to be dictated in large part by Schlumberger (NYSE: SLB), Halliburton (NYSE: HAL) and National Oilwell Varco (NYSE: NOV), the three largest oil services companies. Those stocks, which combine for over 37% of OIH’s weight, are up an average of 5.3% in the past month, roughly the same performance delivered by OIH over that period.
Market Vectors Oil Service ETF
