Technician Carter Worth: Buy Oil Services
Triangle week continues here on Allstarcharts with a look at the Energy sector, and more specifically Oil Services as a group. Carter Worth, Chief Market Technician at Oppenheimer, shares a few charts with us today via CNBC. The first one shows the Energy Sector ETF ($XLE) currently stuck in this wedge (or symmetrical triangle) formation:
According to Worth:
"The numbers speak for themselves. Of the deep cyclical sectors: Materials, Energy, Financials, Industrials - Energy is number one year to date. They're coiling nicely and the presumption is higher prices as the stocks catch up with the move in Crude."
"Within the sector, Energy, there's a sub-sector - the Oil Services which have lagged dramatically. And that is a divergence which we think you can play on the long side. So $OIH is the ETF for Oil Services - captures names like Schlumberger ($SLB), Halliburton ($HAL), Weatherford ($WFT) and if you look at a chart of that sub-sector vs the Energy sector - $XLE the divergence is quite extreme. We think you get long Oil Services $OIH."
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