Bearish Divergence In OIH After 8 Day Winning Streak

July 17th, 2009

Mid-afternoon the markets remain choppy at best. As I said this morning, getting through this whole 950-ish area is going to be a big pain in the rear. In addition Oil has been on a nice little rally over the past week – leading the markets higher. Even still, there is clear bearish divergence in the OIH with it’s volume. As you can see in the chart, every day that OIH climbed higher the volume dropped. For sustained bullish movements this is not a good indicator and we all know could happen next if we are not careful. And not only is it reaching over-bought levels quickly but $100 seems to be a HUGE resistance level to get through. Don’t say I didn’t warn you all.

 

oih1

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