NEW YORK (Real Money) -- The dollar has made commodities a more difficult read. The action in Europe has not only kept the euro and dollar bouncing around, but also played havoc with oil. When there is a lot of whipsaw action and doubt in oil, we often see it reflected in the Market Vectors Oil Services ETF (OIH) - Get Report

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After a very strong six-week period from mid-March through the end of April, OIH has hit the skids a bit. This year hasn't been horrible, with the OIH down just a couple of ticks, but down is down and that's where the path of least resistance still stands. Since the recent May top, price has steadily moved lower in a bearish channel. At first, it looked like nothing more than a bullish flag, but the length of the move lower now exceeds the previous move higher. That's no bullish flag folks. It's a bearish channel.

Support comes into play at the base of the channel with resistance at the top. Fairly simple; however, if OIH closes under the first level of support, I would look for it to head all the way to the $32 area. Nothing in the technicals, whether on this chart or other ones I use, shows any divergence or bullish hint of activity. The only good news might be the short-term correlation between West Texas Intermediate (WTI) crude and OIH is zero at the moment. The bad news is the OIH chart isn't bullish, so the lack of short-term correlation isn't really a plus. Additionally, the last six weeks have seen WTI hold steady while OIH has fallen. Still want the zero correlation?

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The recent channels become clearer on the weekly chart. Once we can go back into late 2014, a new band of resistance just above the current channel resistance can be seen making the upward path tough. This indicates that while we can bounce in the channel, there is nothing bullish about this chart until a weekly close over $37.50 is achieved.

Although short-term correlation may be zero, the longer-term correlation is still very high. Furthermore, the Commodity Channel Index (CCI) has just crossed below zero in the past few weeks and the Force Index is just crossing under zero into bearish territory. The last cross, in fall 2014, was disastrous for bulls, so they need to see that reverse right now. If it doesn't, the best case scenario appears to be a slow bleed lower with only a 3-4% drop. That's not terrible, but not particularly cheery if you are long.


Both Nike (NKE) - Get Report and Zoetis (ZTS) - Get Reporthit their targets, albeit in after-hours/pre-market trading thus far. Nike is only hitting the minimum target, so I see it as no more than a partial sale, while Zoetis appears to be more of a full sale or at least two-thirds of the position. If owning calls, one could short stock to lock in the gains here rather than wait for the market to open.

On the flip side, Freeport-McMoRan (FCX) - Get Reportwill be a stop today if it closes under $19.90. The other approach to this one would be buying $20 short-term puts against the position. The focus though is to eliminate any further significant downside.

Editor's Note: This article was originally published at 9:30 a.m. EDT on Real Money on June 26.

This article is commentary by an independent contributor. At the time of publication, the author was long ZTS calls, NKE and FCX; and short ZTS.