Backtest: Buy OIH at the close when OIH closes lower for two consecutive sessions while...
A strategy built on oil services lagging a two-day crude rally returned just 1.08% on $100,000, while SPY buy-and-hold gained 85.28% over the same window. That gap is the finding.
The test buys OIH at the close when it has fallen two consecutive sessions while Brent crude has risen two consecutive sessions. It exits when OIH closes above its 5-day simple moving average or after five trading days, whichever comes first. The thesis: forced supply is holding the basket back, and it snaps back once liquidation clears.
The snapback did not produce a durable edge. The full bar-by-bar evidence and trade-by-trade detail are below.
Buy OIH at the close when OIH closes lower for two consecutive sessions while Brent crude closes higher for two consecutive sessions; exit when OIH closes above its 5-day simple moving average or after 5 trading days, whichever comes first. An oil-services basket failing to follow a two-day crude rally is being held back by forced supply, so OIH tends to snap back once the liquidation clears.
How this was measured
This is a simulated backtest generated from the plain-English strategy below, executed bar-by-bar on historical market data using the price + news data mode with $100,000 starting capital. Strategy: Buy OIH at the close when OIH closes lower for two consecutive sessions while Brent crude closes higher for two consecutive sessions; exit when OIH closes above its 5-day simple moving average or after 5 trading days, whichever comes first. An oil-services basket failing to follow a two-day crude rally is being held back by forced supply, so OIH tends to snap back once the liquidation clears.
The key numbers
The charts
The takeaway
The strategy returned +1.08% on $100,000 starting capital across 13 closed trades with a 54% win rate. Over the same window SPY buy-and-hold returned +85.28%, so the strategy finished trailing the benchmark by 84.20 points. Best single trade +3.63%, worst -4.82%.
The fine print
- Simulated results on historical data — fills, slippage and costs are idealized.
- Past performance does not predict future results.