The last phase of the rise in these stocks was very parabolic, which at a minimum signifies a near term top. Momentum markets trade on psychology more than earnings visibility. The ag stocks topped out over a month ago and they also have a lot of earnings visibility. We need a wash out of the oil stocks before moving higher. I still think that the next 1-2 months the oil and other energy and commodity stocks will correct at least 20%. Even if oil moves higher, the oil stocks will not. The market is telling us that oil above $130 will adversly impact our economy. Fear is never good for stocks, even oil stocks. This has been a very crowded trade and when everyone realizes whats happening, the downside volume will pick up. I plan to sell into stregth, rather than build new positions.
if you think oil is going lower short the uso not the oih. as you seen in the past the oih doesn't necessisarily track with the price of crude. 20%?????. in reality these stocks are still cheap compared to many other sectors. i for one will be on the other side of the trade