The VanEck Oil Services ETF (OIH) may not be making headlines lately — especially with large-cap growth and meme stocks dominating both the news cycle and performance rankings — but it has been showing signs of life, which we should keep on our radar going forward. First, it’s clear that the ETF has been trending higher since the April lows, though the advance has been jagged so far. OIH has been making higher lows, but each rally attempt has eventually been sold into. That being said, both of the recent pullbacks have respected the rising 50-day moving average, which now has begun to act as support, along with the breakout zone from early June around 225. If we see more follow-through going forward — and potentially a breakout from a second bullish pattern (highlighted in green below) — that would be a clear constructive development on the charts. Additionally, the 14-day RSI has recently bottomed near the 50-midpoint, which is a step in the right direction. This is in stark contrast to what occurred from February through April, when OIH consistently failed to stay above its 50-day moving average and the RSI struggled to rise above its midpoint. Zooming out a bit further, we can see that technical challenges remain ahead. On this chart, there’s a confluence of resistance — with three resistance lines all converging just under $260 zone. First, the breakdown zone from earlier this year is marked by a horizontal line. In addition, the downtrend line drawn from the July 2024 high also extends down to that same area. Finally, the 200-day moving average, which is downward sloping, is essentially hugging that same downtrend line. All three converge near 260, creating a clear cluster of supply that OIH must contend with. In the bottom panel, we again see the 14-day RSI from the first chart — this time highlighting what has happened in the past when the indicator has returned to overbought territory. Historically, those moments have coincided with faded advances. Needless to say, OIH must do a better job of first negotiating this cluster of resistance and then proving it can advance even while overbought — something it hasn’t successfully done in over a year. Lastly, here is a weekly chart that goes all the way back to 2005. It highlights the rare occasions when OIH endured weekly declines of at least 20%. As is clear, these events have been uncommon, occurring in 2008, 2020, and most recently in 2025. There are a few common characteristics that appeared during those 20% down weeks. First, they occurred toward the end of much larger selloffs — with the previous episodes resulting in total drawdowns of approximately 70%. Second, each of those major declines was followed by a powerful multi-year rebound. From the 2008 lows through early 2011, OIH rallied 150%. From the COVID lows in 2020 to the 2023 high, the ETF gained 370% Most recently, OIH sold off more than 40% from the 2023 high to its 2025 low just a few months ago. Since then, it has rallied about 30% — a substantial move in a short amount of time, but still much smaller than the prior rebounds. If, for example, OIH were to rally 100% from the recent trough, the ETF would be trading near $415. That would place it above the 2023 high and back to levels last seen in 2018, though still below the breakdown zone that developed during that earlier period. Ultimately, for OIH to take the next step and sustain this advance, it must not only continue breaking out from bullish patterns, but — more importantly — prove it can withstand the next pullback. That means remaining above the rising 50-day moving average in the near term, which would give it a legitimate shot at overtaking the key resistance levels outlined earlier. — Frank Cappelleri Founder: https://cappthesis.com DISCLOSURES: (None) All opinions expressed by the CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, NBC UNIVERSAL, their parent company or affiliates, and may have been previously disseminated by them on television, radio, internet or another medium. THE ABOVE CONTENT IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY . THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL’S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR. Click here for the full disclaimer.
