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Oil Services Stocks Are Looking Overbought

|Includes: BHGE, HAL, VanEck Vectors Oil Services ETF (OIH), SLB
The oil services stocks have simply been on fire as of late. The popular and highly traded Oil Services Holders Trust (NYSE:OIH) has rallied higher by $20.00 since June 27, 2011. That is a 15.0 percent increase in less than one month. Many of the leading oil services stocks have had even better moves. The sector still looks very strong on the charts trading above all of the major moving averages. The only problem that a technical chart trader can see is that the sector is overbought and extended at this time. Normally, when a stock, or sector gets this extended it will need to pullback and consolidate before moving higher. Institutional traders will usually let the stock pullback or form a base before buying more shares.

Some of the leading oil services stocks that are short term extended at this time are Halliburton Co.(NYSE:HAL), Schlumberger LTD.(NYSE:SLB), and Baker Hughes Inc.(NYSE:BHI). These stocks are still leading stocks that remain strong on the charts, however, at these levels a pullback or consolidation is in order.

Nicholas Santiago