There's a huge debate on whether or not crude oil has bottomed. It's all about supply and demand! Here's what the technical charts have to say.

OPEC members will be meeting this weekend to decide whether or not to freeze or cut oil production. A potential limit on supply has Nymex crude oil futures above their 200-day simple moving average at $41.13 per barrel for the first time since July 31, 2014, when this average was $99.86.

Back on Feb. 8, I explained why the time was right to "catch a falling knife" for oil services stocks, even as they fell through the floor.

Crude oil bottomed at $26.05 on Feb. 11, and investors had the opportunity to buy shares of oil services stocks Diamond Offshore (DO - Get Report) , McDermott (MDR - Get Report) , Noble (NE - Get Report) , Transocean (RIG - Get Report) and Tidewater (TDW - Get Report) as these stocks were trading below their late-2008 or early-2009 lows, with three trading at 20-year lows between Jan. 20 and Feb. 24. On March 9, I made the case to book gains on these stocks.

What's interesting today is that while oil is poised to move higher, the five oil services stocks are significantly below their recent highs, which is a warning that the upside for crude oil should be limited.

Here's the daily chart for crude oil.


Courtesy of MetaStock Xenith

Crude oil closed at $42.22 on Tuesday, up 14% year to date and 62.1% above its Feb. 11 low of $26.05. The 2016 high of $42.49 was set on March 4.

Crude oil has been under a "death cross" since Sept. 4, 2014, when its 50-day simple moving average declined below its 200-day simple moving average with the close on oil at $94.45 that day. A "death cross" occurs when the 50-day simple moving average falls below its 200-day simple moving average, indicating that lower prices lie ahead. Oil is now above its 200-day and 50-day simple moving averages at $41.04 and $35.41, respectively.

Here's the weekly chart for crude oil.


Courtesy of MetaStock Xenith

The weekly chart for crude oil is positive, with oil above its key weekly moving average of $38.11 but well below its 200-week simple moving average of $77.86. The weekly momentum reading is projected to rise to 76.93 this week, up from 74.92 on April 8.

At the beginning of the year, my proprietary analytics projected that if crude oil failed to hold $34.07, the downside risk was to $29.90 by the end of March. This quarterly level from my model became a magnet following the Feb. 11 low of $26.05, providing a reason for stability.

My message on Jan. 4 was that the upside for oil would be limited $44.07 to $48.75, as the world gets used to a lower threshold for energy costs. The key level to hold in April is $33.69, and the April 5 low was $35.24.

Here's the scorecard for crude oil and the five oil services stocks.

 

The weekly charts shown next are mixed.

Here's the weekly chart for Diamond Offshore.


Courtesy of MetaStock Xenith

The weekly charts show a red line through the price bars, marking the key weekly moving average (a 5-week modified moving average). The green line is the 200-week simple moving average, the "reversion to the mean." The study in red along the bottom of the chart is weekly momentum (a 12x3x3 weekly slow stochastic), which scales between 00.00 and 100.00, where readings above 80.00 indicate overbought and readings below 20.00 indicate oversold. A negative weekly chart shows the stock below its key weekly moving average, with weekly momentum declining below 80.00 in a trend toward 20.00.

The weekly chart for Diamond Offshore ($22.25 on April 12) is neutral, with the stock above its key weekly moving average of $21.44 but well below its 200-week simple moving average of $46.80. The weekly momentum reading is projected to decline to 67.69 this week, down from 69.51 on April 8.

The stock is up just 5.5% year to date. It is 12% below its March 4 high of $25.27, but it is up 56.9% above its Jan. 20 low of $14.18.

Investors looking to buy Diamond Offshore should consider doing so on weakness to $19.53, which is a key level on technical charts until the end of April. A lower buy level is $15.09, in play until the end of June.

Investors looking to reduce holdings should consider doing so on strength to the March 4 high of $25.27.

Here's the weekly chart for McDermott.


Courtesy of MetaStock Xenith

The weekly chart for McDermott ($4.02 on April 12) is positive, with the stock above its key weekly moving average of $3.76 but well below its 200-week simple moving average of $7.10. The weekly momentum reading is projected to rise to 75.19 this week, up from 74.09 on April 8.

The stock is up 20% year to date. It is 9.5% below its March 17 high of $4.44, and it is up 82.7% above its Jan. 20 low of $2.20. Remember that buying a stock trading between $1 and $3 can be considered buying an "option on survival."

Investors looking to buy McDermott should consider doing so on weakness to $3.60, which is a key level on technical charts until the end of April. The low of $3.53 set on April 5 provided a buying opportunity.

Investors looking to reduce holdings should consider selling strength to $5.03, which is a key level on technical charts until the end of this week.

Here's the weekly chart for Noble.


Courtesy of MetaStock Xenith

The weekly chart for Noble ($10.83 on April 12) is neutral, with the stock above its key weekly moving average of $10.17 but well below its 200-week simple moving average of $24.23. The weekly momentum reading is projected to decline to 49.47 this week, down from 50.40 on April 8.

The stock is up 2.7% year to date. It is 22.1% below its March 7 high of $13.90, but it is up 61.6% above its Feb. 3 low of $6.70.

Investors looking to buy Noble should consider doing so on weakness to $9.84, which is a key level on technical charts until the end of April. This level has provided a buying opportunity between April 1 and April 7. The 50-day simple moving average of $9.35 was another buy level on April 7.

Investors looking to reduce holdings should consider doing so if the stock rises to $12.82, which is a key level on technical charts until the end of this week.

Here's the weekly chart for Transocean.


Courtesy of MetaStock Xenith

The weekly chart for Transocean ($9.59 on April 12) is negative, with the stock below its key weekly moving average of $9.74. It is well below its 200-week simple moving average of $34.20. The weekly momentum reading is projected to decline to 30.11 this week, down from 34.14 on April 8.

The stock is down 22.5% year to date. It is 28.9% below its March 4 high of $13.48, but it is still up 25% above its Feb. 24 low of $7.67.

Investors looking to buy Transocean should consider doing so on weakness to $3.20, which is a key levels on technical charts until the end of June.

Investors looking to reduce holdings should consider doing so if the stock rises to $10.53, which is a key level on technical charts until the end of April.

Here's the weekly chart for Tidewater.


Courtesy of MetaStock Xenith

The weekly chart for Tidewater ($7.97 on April 12) is neutral, with the stock above its key weekly moving average of $6.88. It is well below its 200-week simple moving average of $38.76. The weekly momentum reading is projected to slip to 35.13 this week, down from 35.25 on April 8.

The stock is up 20.6% year to date. It is 31.2% below its March 7 high of $11.58, but it is still up 25% above its Feb. 24 low of $7.67.

Investors looking to buy Tidewater should consider doing so on weakness to $6.36, which is the 50-day simple moving average. That level was tested almost each day between March 24 and April 11.

Investors looking to reduce holdings should consider doing so if the stock rises to $8.76 and $10.86, which are key levels on technical charts until the end of this week and until the end of June, respectively.

This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.