4 replies to this topic

[A-ha]

52 week lows to be taken out as if they are not even there before... and you can actually hold your breath to see it.

[denleo]

What makes you so bearish on OIH? I am neutral, but would consider a short position if you show me something bearish. Or are you just bearish on Crude Oil for fundamental reasons? Thanks Denleo

[A-ha]

What makes you so bearish on OIH? I am neutral, but would consider a short position if you show me something bearish. Or are you just bearish on Crude Oil for fundamental reasons?
Thanks

Denleo

Well, I dont know where to start...

Aside from fundamentals, on both Crude and this sector, lets say we know nothing about them and take a look at the charts....

Here is 10 year weekly chart of crude oil... I don't have to comment on this do I?


Ok lets say nonlinear correlation between OIH and crude is out of whack and OIH starts going higher despite declining crude....So here is how much room it has..... 5 year weekly chart of OIH.


and below is the sector index, note that where it is now.


it is always useful to check underlying components when analyzing an index. BHI is the largest component of OIH. Here is how it looks on 5 year weekly. Dont be fooled with that attempted rally, BHI is broken


here is the lifetime monthly


There are tons of ugly things from other components I can bring here but these must be enough...
However you should recognize one thing about this sector. OIH has a very high beta, when you short this you gotta take it slow and have a plan. I been through many stop runs and fakeouts despite the accuracy of my analysis.

Edited by xD&Cox, 08 February 2007 - 07:11 PM.

[denleo]

Thanks. I will consider some kind of bearish options strategy. Denleo

[vitaminm]

OIH>140?

http://finance.yahoo...X OIH...0&a=&c=