In scrutinizing the following chart, I think the possibility of crude oil prices stabilizing from 75 to 80 is very high. Moreover, based on history, Crude Oil prices tend to rebound when it touched the said support zone.
Besides, as we all know, decline of oil prices also impact the performance of oil exploration/production and services companies. Here, I posted two ETF charts: “XOP – SPDR S&P Oil & Gas Explor & Product” and “OIH – Market Vectors Oil Services ETF”.
- XOP – The S&P Oil & Gas Exploration & Production Select Industry Index represents the oil and gas exploration and production sub-industry portion of the S&P Total Markets Index. The S&P TMI tracks all the U.S. common stocks listed on the NYSE, AMEX, NASDAQ National Market and NASDAQ Small Cap exchanges. The Oil & Gas Exploration Index is an equal weighted market cap index
- OIH – The Index is a rules based index intended to track the overall performance of 25 of the largest U.S. listed, publicly traded oil service companies.
Both charts show that both indexes approaching its respective support zone. So, in theory, the indexes may stabilizing in the zone. Of course, I don’t eliminate the possibility of breaking below the support zone if the oil prices continue to decline.