Basing Pattern Breakout
For this first blog of 2018, we are looking at an industry that had a poor performance in 2017. This is the oil services within the energy sector. Below is a weekly chart of the VanEck Vectors Oil Service ETF ($OIH) which has not only under-performed the overall market but is in a downtrend (red trendline) since its 2014 high (double top June/July'14).
Fast forward to mid 2017 and $OIH has been able to set a (long-term) higher low from "the" low in 2016. Right now, $OIH needs to lift through the current confluence of resistance:
1. Fibonacci's retracement level from the January-December'16 advance (blue line).
2. Previous support turned resistance (gray area).
The next resistance will be aforementioned downtrend line (red) which coincide with the next Fibonacci's retracement level.
The following resistance would be the target of a measured moved from the breakout of this 6-month basing pattern at $31.50.