OIH Caution 060507

One of the strongest sectors, in the past three months, has been oil services and energy. Tracking the OIH shows a steady, uptrending channel. It’s time to stay cautious though. The holdr has touched the bottom side of the trend channel three times now. This sets up what Jeff Cooper refers to as, a rule of 4 trading pattern. When an equity touches it’s trendline three times, and holds, the odds increase the fourth time for a breakout, or breakdown of the trendline.

Until that occurs, I’m trading on the long side in stocks such as, DVN DO, ECA, COG, SWN, and VLO. Keep using those trading patterns for entries, and setting those stops.