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.