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OIH Forming Bullish Technical Chart Pattern

Scott Redler
Dec 1, 2011, 11:41 AM

The Oil Service HOLDRs ETF (OIH) has been beaten down over the past few months, but I believe it is starting to form an inverse head and shoulders bottoming pattern that could lead to significantly higher prices. Right now it is only worth a tier 1 long at most because the pattern is not yet complete.

 

Fundamentally, many believe the oil service sector is running at a discounted valuation. Inflationary actions from world central banks, the latest and greatest of which was announced yesterday, should see oil prices rise sharply once again.

 

 

 

At some point these lagging type stocks can get some momentum if this markets stays intact.

 

*DISCLOSURES: Scott Redler is long OIH

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