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Rally In Oil Stocks Likely Over Should Support Break

By Chris KimbleCommoditiesJun 24, 2022 03:52PM ET
www.investing.com/analysis/rally-in-oil-stocks-likely-over-should-support-break-200626267
Rally In Oil Stocks Likely Over Should Support Break
By Chris Kimble   |  Jun 24, 2022 03:52PM ET
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For over 2 years, all crude oil prices did was go higher and higher. And consumers have been feeling this pain as the gas pump.

Well, this month, crude oil prices turned sharply lower, joining the broad-based commodities selloff. Could this be the start of a long-awaited pullback?

If so, oil-related stocks and sectors would likely also turn lower. It’s that day of the week, so let’s turn to Joe Friday for “The facts, Ma’am. Just the facts.”

Today’s chart is a long-term monthly overview of VanEck Oil Services ETF (NYSE:OIH).

OIH Monthly Chart
OIH Monthly Chart

As you can see, OIH has been in a falling channel marked by each (1) since it started creating lower highs back in 2008.

The latest 2-year counter-trend rally looks to have hit dual resistance at (2), where OIH could be creating a large bearish engulfing pattern. And this month’s turn lower is now testing important trend line support at (3). If this support breaks, oil stocks could head much lower!

Could the oil stocks’ counter-trend rally be over? Stay tuned.

Rally In Oil Stocks Likely Over Should Support Break
 

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Rally In Oil Stocks Likely Over Should Support Break

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Comments (3)
Doug Harwood
Doug Harwood Jun 25, 2022 9:41PM ET
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Stay tuned? Another prognosticator who believes charts are more important than fundamentals. Under investment in the energy sector and increased demand are the drivers - not charts.
Jeff Stuart
Jeff Stuart Jun 25, 2022 9:41PM ET
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Another commentator who thinks the markets care about fundamentals. If fundamentals mattered, oil stocks would already be much higher.
Corey Smitherman
Corey Smitherman Jun 24, 2022 5:24PM ET
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The fundamentals are still very bullish. We may very well experience a bear market for a bit, but once worries fade and real life sets in, we should see a reversal back upwards. And it may very well stay there for a loooong time!
Don Getty
Don Getty Jun 24, 2022 5:24PM ET
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we're bearish for two weeks until summer holidays are in full swing then demand draws will kick in - we've had two builds on 14 m/barrels released from the spdr - no real change in the supply demand equation but the demand for summer is just starting - stay tuned is weak analysis - like rubbing a crystal ball and saying I'll tell you the answer to your ? in 6 weeks after all the facts are already available
John Minnee
John Minnee Jun 24, 2022 4:46PM ET
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OIH oil services SLB, etc is not the same as XLE the oil business index. Declining OIH reflects continuous under-investment which can be very bullish for WTI and XLE.
 
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