Potential Trend Trade: OIH

The Oil Service Holders etf (OIH) has been channeling since mid November and has printed a nice chart pattern that could lead to a good trade. The key will be to see a break to the upside and then for the upper channel line to support the price after the break. Here's the daily chart:As you can see from the chart, I kinda mapped out what I thought the potential price action might look like...or at least what I think the ideal price action would look like. The entry would be around $90 with a stop placed around the $80 level and the profit targets are $124 and $143 roughly. If OIH breaks out in a similar fashion, I'll enter around $90 and sell half at $124 (protect profits) and sell off the remaining at the second profit target.

Other things to notice about this chart are the rising RSI and OBV indicators...this sometimes gives you the heads up that a breakout is likely to occur soon. The other interesting thing to note is the low BB Width. The BB Width measures volatility by printing the distance (or width) between the 2 Bollinger Bands. One thing I like to see is for the BB Width to break and rise quicly with the breakout in price action...this indicates that the breakout is more likely to sustain and move quite a bit, as opposed to a false breakout that fizzles out quickly.

Thought this was an interesting chart and wanted to share it with everyone.

TLT