DailyPlay – Opening Trade (OIH) – July 30, 2024

OIH Bullish Opening Trade Signal

Investment Rationale

As crude prices drop to a major support level around $75, reaches oversold conditions and geopolitical risks rise, a potential opportunity arises in energy stocks. One way to seek bullish exposure is using the Oil Services ETF (OIH). With SLB, BKR and HAL accounting for nearly 40% of the ETF. We currently see strength in these energy names, especially if oil bounces from these levels. OIH recently broke out above its $330 resistance level which now acts as support. I’m using options to seek a neutral to bullish exposure by selling the Sept 6 $330/$312.5 Put Vertical @ $7.00 Credit. 

OIH – Daily

Trade Details

Strategy Details

Strategy: Short Put Vertical Spread

Direction: Bullish Credit Spread

Details: Sell to Open 2 OIH Sept 6th $330/$312.50 Put Vertical Spreads @ $7.00 Credit per Contract.

Total Risk: This trade has a max risk of $2,100 (2 Contract x $1,050) based on a hypothetical $100,000 portfolio risking 2%. We suggest using 2% of your portfolio value and divide it by $1,050 to select the # contracts for your portfolio.

Trend Continuation Signal: This is a bullish trade on an ETF that is in a bullish trend, and expected to continue higher.

1M/6M Trends: Bullish/Bullish

Relative Strength: 7/10

OptionsPlay Score: 99

Stop Loss: @ $14.00 Debit. (100% loss to the value of premium)

View OIH Trade

Entering the Trade

Use the following details to enter the trade on your trading platform. Please note that whenever there is a multi-leg option strategy, it should be entered as a single trade. 

PLEASE NOTE that these prices are based on Monday’s closing prices. Should the underlying move significantly during the pre-market hours, we will likely adjust the strikes and prices to reflect a more accurate trade entry. 

View OIH Trade