• Over the past 10 weeks the OSX is up 21%, rebounding from its January low of 180.30. Degree and duration of the move is consistent with historical rallies, +22% on average between 1997 and 2006.
• Group could see a 5-10% retracement over the next several weeks, in our view as buy interest subsides given the group's recent run and as investors await 1Q earnings and the impact of the shoulder period on commodity prices.
• Investors look for 1Q earnings/commentary within expectations and visibility on commodity prices through the shoulder period before taking the group materially higher.