OIH Update

I've had several requests for an OIH update so I figured I'd just post it here, it's just another piece of the puzzle so even if you aren't interested in a trade, you can probably find some value in the charts.

 First OIH vs the Euro (red), the Euro has seemingly had some influence on OIH on this 15 min chart as the Euro turned down as OIH kept moving higher in the first red box (FX negative divergence) and now, like much of the market, OIH is off its risk asset legacy arbitrage correlation (the same issue we are dealing with shorter term in the market's this morning).

 This is speculation at this point, but there is a bit of a triangle pattern developing, on this timeframe and trend, the size of the triangle would suggest a probable bottom rather than a consolidation/continuation pattern. RSI was positive at the lows on 5/18, volume is falling off, it' a bit too early to say, but I'd guess that may be a bullish triangle. If so, that would have some direct consequences for expectations re: the duration and strength of an upside move in the market unless the Energy sector just becomes totally unhinged from the broad risk assets/stocks, etc; which would have to be based on something more fundamental in Energy.

 The 1 day trend channel holds swing moves in OIH, the red trendlines are the stop/cover, you can see one at the orange triangle, a sustained break above $37.90 would suggest a swing move up.

 On a 2 day chart, the Trend Channel holds moves of several months, you can see the long stop at the orange arrow and a move above $38.75 would suggest a decent move up. Judging by the size of the possible triangle, this chart would make sense as to the duration of the move, they fit together pretty well.

 The 1 day 3C chart shows distribution at the top, confirmation of the downtrend and a recent positive divergence, again suggesting if that is a large triangle, it is a base, not a continuation pattern.

 The 60 min chart confirms the daily, distribution at the May 1 highs and a positive divergence developing in the area of the suspected triangle.

 The 30 min chart also confirms the same.

So now we have a decent idea what it is, it's a matter of timing. Here's the 2 min chart, it is acting just like the broad market which isn't surprising as most risk assets have the same EUR/USD correlation, certainly energy does and services shouldn't be too far behind.

 The 3 min chart shows something that argue for that price pattern being a triangle, as price moved too high, there was a short term divergence knocking them back down to an area in which they would be accumulated, there's a positive divergence at that area as well.

The 5 min chart shows the same.

My guess is this is a triangle base, it would be very bullish in the near term if the base broke out in this area with about 2/3rds of the triangle complete, should the triangle complete to the apex, that would have some longer term implications for the size/length of a market counter-trend rally (bounce).

I personally wouldn't take a position in OIH right now, but it's definitely worth keeping on the radar.