Oil’s Dip Brings This Sector ETF Into Focus For Bears
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The market rally seems to be once again to be taking a breather. Nvidia (NVDA) after its meteoric rise has fallen back below 400 after leading much of the hype in the market over the past couple weeks. Is the rally over? Tough to say unequivocally, but there is definitely some weakness in the market as of right now. Something traders will want to be weary of, especially after the debt ceiling deal has finally been inked.
For now, we will look for the weaker sectors of the market in order to find a trade for our Smart Trades community to put on. The trade with the highest probability at the moment? Shorting the energy industry with one of our favorite oil ETFs.
VanEck Oil Services ETF (OIH)
The OIH is one of the energy sector ETFs we like to trade the most, and therefore, trade often when there is an opportunity to do so. This time, the set up comes as oil prices dip in a market that is showing weakness.
Normally the overall market and the oil industry have somewhat of an inverse correlation, however, the weakness of the energy sector is too much to ignore. After the price of oil dipped below that $70 mark, it opened up the industry to more downside.
To capitalize on that weakness, we are looking at shorting the OIH. If OIH can come up to retest 250 without breaking above it, this could be the entry traders are looking at to put on this trade. Keep this one on your watchlist as this week of trading wraps up.
Join my Smart Trades options trading service today to see exactly how my students and I trade these types of scenarios! Smart Trades is where I teach my students how I trade options on some of the largest ETFs on the exchange. As you learn, you’ll get exclusive access to all my trades with notifications any time one is put on. Now, you can learn how many use this high-income skill to achieve financial freedom. Join today and as always…
