Let’s start with the Oil Service sector chart: $OIH, shall we?

The above is a weekly chart.  One quick look and you know it is on a strong uptrend.

Fundamentally speaking, there are strong demand for oil service in the coming future.  Do you know why?

The Permian Basin region

Believe it or not, the ongoing speculation is that the Permian Basin has the potential to be the world second largest oil field behind Saudi Arabia.  This speculation is also my reason in owning $PXD.

With that kind of oil reserve underneath, oil service industry is going to be quite busy, don’t you think?

Personally, I like to trade $WG.

Take a look at the weekly chart below:

While there are zig-zag on the price movement, the general direction is still up. Recent correction from earnings report provided the “zag”/correction for me to buy in for the ride.

Today, $WG bounces off the daily 5 MA and takes out the high of the last five days; this is good enough for me to start a position.

If price can close above the 79 & 89 MA lines today, it will be further confirmation that $WG can rebounce from here and move on higher through out 2014.

My 2 cents.

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With oil ($UCO) being up so much since the beginning of the month, it is a matter of time before oil service company such as $WG breaking out to play catch-up.  Today is the day $WG kicks off the starting gate.

Take a look at the daily chart below, today breaking out of the last week pivot high kicks off the start of wave 3 of the Elliott Wave Theory.  According to the theory of Elliot Wave, wave 3 is normally the longest wave of the 5 waves pattern.  Therefore, I expect today price action will zigzag all the way to previous high of $10.45 or more.

Needless to day, I bought $WG when price action took out last week high.

My 2 cents.

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