Thursday, March 15, 2007

Oil Drillers Showing Relative Strength



Over the past few days crude oil has been moving lower while the osx has been moving higher. That alone gets my attention for a potential trade on the long side.

Notice how crude oil (USO) has made new lows for the month but the OSX index is making a higher low. I consider that a bullish divergence which alerts me to the possibility of a buying opportunity. I haven't done anything yet but I will watch these stocks over the next few days as potential longs.

I'm hesitant to buy stocks right now since my view on the overall market is still bearish, however I can't let my own subjective evaluation of the market blind me to what I'm seeing take place. If I get a buy signal in oil stocks, I have to take it.

Some of the strong oil drillers I will be watching are: SLB, SII, CAM,ESV,WFT and TDW.... TSO and VLO (not drillers) I'm watching as well.

3 comments:

Kevin said...

I agree...IBN looks like it's about to fall out of bed.

Blain Reinkensmeyer said...

Nice post Kevin, I would love to get back into the oil drillers sector. I like your comment on taking action if the buy signals are there, I agree man!

dps said...

Nice comparison...thanks.

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