May 29, 2009 (FinancialWire) — Dr. Joe Duarte (http://www.joe-duarte.com) recently noted: The U.S. Oil Fund ETF (NYSE: USO) made a new high on 5-28, but the Oil Service HOLDRS Trust (NYSE: OIH) didn’t quite get there.

Duarte added: Anyone who reads this space regularly is familiar with the fact that oil service stocks tend to lead the advance for the oil sector. Which is why it’s important for oil bulls to have OIH move to a new high, or at least prove that it can close well above the $100 area, where it’s run into problems of late.

As of 5-28, OIH was more dependent on the overall trend of the stock market, pulling back when stocks fell, rather than going along with rising crude prices. The recent high for OIH was 105.06 on May 7. If OIH can close above that level convincingly, it could move toward 125 before meeting significant selling pressure.

The fact that OIH is lagging a sign of uncertainty on the part of stock traders, which suggests that for now, the odds are on the commodity moving higher with regard to the stocks. That relationship is sustainable for short periods of time, but has to be resolved, with either the stocks confirming or the commodity moving higher. Right now, the stocks are lagging enough to bring in some doubts.

Duarte’s conclusion: In the long haul any sustainable advance in oil needs both the oil service sector as well as oil itself in order to last more than a few weeks. Dr. Duarte owns shares in OIH.

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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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