Few equity-based exchange traded funds are enjoying the oil renaissance on par with oil services funds, including the Market Vectors Oil Service ETF (NYSEArca: OIH). OIH, the largest the ETF dedicated to oil services stocks, is up nearly 24.5% over the past three months, but the fund’s tumble during oil’s decline the previous two years still looms large.

The reason being is that, in the eyes of some chartists and technical analysts, even with OIH’s recent surge, the ETF has yet to confirm a new uptrend. Other options among oil services ETFs include the SPDR Oil & Gas Equipment & Services ETF (NYSEArca: XES), iShares Dow Jones U.S. Oil Equipment Index ETF’s (NYSEArca: IEZ) and the PowerShares Dyanmic Oil and Gas Service ETF (NYSEArca: PXJ).

PXJ follows a fundamentally weighted index, which selects stocks based on price momentum, earnings momentum, quality, management action, and value. Importantly, that methodology steers PXJ away from the large weightings to a small number of stocks as is seen in rival oil services ETFs.

OIH “posted a higher low in August 2002 and took off in an historic rally that ended six years later at an all-time high in the upper 70s. The July 2008 peak gave way to a vertical collapse that relinquished nearly all the bull market gains in just five months, finally coming to rest at a four-year low just above 20. The subsequent bounce failed at the .618 Fibonacci retracement two years later, with that level containing the upside for the last five years,” according to Investopedia.

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However, plenty of skeptics remain regarding oil’s fundamental outlook. There might be something to that skepticism as many of the world’s major ex-U.S. producers of oil have not displayed a willingness to pare production. Even the output reductions in the U.S. have been modest. The good news is U.S. shale output is slightly declining, but challenges remain on the output front from OPEC producers.

Oil companies are reducing costs by laying off thousands of workers and halted many new projects. Large integrated oil companies are expected to hold up better than drilling stocks as these giants have both upstream exploration and production, along with downstream refining operations.

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