Oil Stock Fakeout or Shakeout

I’m not so sure that today’s lower close for oil stocks isn’t just a headfake. OIH broke above 221 yesterday, and should retest that level, which it quickly did today. The close below 221 raises red flags for a possible failed breakout, but I’m guessing not. Note how OIH stalled at the intraday 200 ma on the 5-minute chart. It shakes out longs with stops under 221, but doesn’t pull too far away either. Probably crazy, but I bought some DIG near the close.

I’ve been in and out of DUG, and waiting for another move lower to shake out some longs before really commiting anything there. I wouldn’t mind seeing a blowoff top type move in oil land here. We’ll see.