May 5, 2009 (FinancialWire) — Dr. Joe Duarte (http://www.joe-duarte.com), recently noted: Oil prices have stabilized and the Oil Service HOLDRS Trust (NYSE: OIH) is showing signs of accumulation.

Duarte added: The oil service sector has been a bellwether for the energy patch for the last several years, replacing the diversified major oil companies in that role. And although it’s hard to pinpoint the reason, at least part of it has to do with the fact that even though demand is down in the short term, long term trends in global economic and population growth suggest that the easy oil has been found and that exploration and oil service companies will have lots of demand for their business over the long term.

That means that there are two ways of looking at this dynamic. If you have 20 years, it’s plausible to consider buying and holding some of the individual stocks in oil service and weathering the ups and downs of the oil cycle.

If that’s what your goal is, then this is an excellent time to add to your positions, as prices are still close to what seems to be a long term bottom in the sector.

If you’re like this scribe, then you’re looking at an opportunity that could provide a positive trend for the next several weeks to months. Again, barring a major external event, the charts are clearly showing positive money flows into oil service.

OIH is a great trading vehicle. It’s liquid, it follows the oil service sector closely, and it’s easy to trade via any online broker.

OIH has been bottoming since October 2008, having held above 60 five times in that period. That proves two things. First, the sellers are likely to be exhausted, and for that matter gone. And second, there have been buyers waiting at 60 every time the ETF has come near that price.

That’s the sign that value players are and have been in the market. The next step is for the momentum crowd to arrive. And that is likely if OIH can break above 95 convincingly, ie. with high volume and staying power. The real test will come around 103. A move above that could take OIH to the 125-130 area.

Duarte’s conclusion: There are two important things to note here. One, set your time frame. Two, remain patient. Most of all, follow your trading rules. Find an excellent trading plan that is applicable to the energy sector in Market Timing for Dummies.

Make sense of today’s nonsense. Get Doctor Joe Duarte’s Market I.Q., at:

http://www.joe-duarte.com/free/order_choices.asp and subscribe to www.joe-duarte.com, for its daily energy review and stock picks.

A book for this market - The All NEW Market Timing For Dummies. at: http://www.tinyurl.com/market-timing .

Duarte partners with the Investors Resource Center at Investrend Information (http://www.investrendinformation.com).

Duarte’s IntelligentForecasts.com (http://www.intelligentforecasts.com) provides free news coverage and analysis, and his daily articles and news summaries offer recommendations and analysis for ETFs, and individual stocks in the technology, health and biotechnology, and energy sectors. Duarte has combined expertise in health care, energy, and the effects of politics and global intelligence on the financial markets offer a unique blend of insight and information to thousands of active investors and political and intelligence aficionados around the world on a daily basis.

He is the author of: Futures And Options For Dummies, Successful Energy Sector Investing, Successful Biotech Investing and co-author of After-Hours Trading Made Easy. In early 2001, in Successful Energy Sector Investing, he correctly predicted that Venezuela’s political problems could lead to an energy crisis in the United States. He has also appeared as a weekly guest on Market Mavens Radio and has logged appearances on KNX radio in Los Angeles, Financial Sense.com radio, and Wall Street Radio.

One of CNBC’s original Market Mavens, Dr. Duarte has been writing about the financial markets since 1990. His articles and commentary have been featured on CBS Marketwatch, Barron’s, Smart Money, Medical Economics, and in Technical Analysis of Stocks and Commodities magazines. In 2003, Doctor Duarte received second place, in the professional section, of the Medical Economics Investment Challenge with a 12-month return of 42%.

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