Cardoggie,
I like to use OIH for gauging the OSX because OIH shows volume. The chart patterns are very similar, close enough for me to consider OIH as an indicator for the oil service sector.
On the accompanying chart, I have drawn two levels of support. OIH successfully tested that first level of support today. When you combine this with the fact that the Stochastic Indicator is showing the oil service sector as oversold, it is possible we'll see a bounce in the next day or two. If not, you look to the second level of support.
What I find encouraging is that the volume bars are contracting. This indicates we're seeing less and less selling. Hopefully, this will encourage some buyers to show up. I would have preferred to see a blow out selling day but, one can't have everything their way.
stockcharts.com[h,a]daclyiay[pf][vc60][iut!lh14,3][J19503447,Y]&listNum=1
Buying off support levels is a much better way of establishing positions, in my opinion, as opposed to guessing at a certain price level and end up catching a falling knife, as I have seen done by a lot of folks.
Buying off support, with an oversold Stochastic and a reversal candlestick pattern, increases the odds of timing the price accurately. We've got two of the three signals needed. Only thing missing at this time is the reversal pattern. If OIH gaps up at the open and closes higher on the day, you've got the third signal. Doesn't gar-ron-tee a reversal but, it sure puts the odds in your favor.
dabum |
