Oil Services ETFs Facing Technical Troubles

The Market Vectors Oil Services ETF

and the iShares Dow Jones U.S. Oil Equipment & Services Index Fund

are following the broader market higher today as traders and investors do some value shopping following two days of significant losses for stocks. However, just how much value can be found with these ETFs and their marquee constituents might be up for debate, at least on a technical basis. The daily charts of IEZ

look eerily similar, which is no surprise given the similarities in their respective lineups. What that could ultimately mean for investors is that not one, but two oil services are vulnerable to more declines. All this despite the fact that

. Looking at OIH, the larger of the two ETFs by assets, the fund's post-QE3 peak was in the neighborhood of $43.50. Since the Federal Reserve's announcement in mid-September, OIH has lost more than $6. A $6 decline equals 13.7 percent meaning this high-beta fund need only fall another 6.3 percent for a 20 percent decline and confirmation of a new bear market. Bearish technicals already exist though as OIH gave up its 200-day moving average last month. As for IEZ, the song is close to the same. The $325.5 million ETF is off 14.2 percent from its September peak and also fell through its 200 day line last month. It bears remembering that it is the demand for or selling pressure on an equity-based ETF's underlying holdings that determines the fund's price action and with IEZ and OIH, that means investors need to pay attention to three stocks. That trio is Schlumberger

, Halliburton

and National Oilwell Varco

. Both ETFs are guilty of the same offense and that is excessive weights to that trio. In OIH, Schlumberger, National Oilwell Varco and Halliburton represent about 39 percent of that ETF's weight. IEZ is not much better as it devotes about 36 percent of its weight to those stocks. That is not good news, particularly regarding National Oilwell Varco. The stock has tumbled $16 since peaking in September around $85. Another $1 lost means the stock will be down 20 percent since September. Welcome to bear market territory. Trading around $30.50 at this writing, Halliburton, the world's second-largest provider of oilfield services behind Schlumberger, is now off 17.5 percent since topping in September. Schlumberger looks sturdy by comparison as the shares are off less than 12 percent over the same time. That stock accounts for 20.6 percent of OIH and 19.4 percent of IEZ. Given the dour technical outlook and the high-beta nature of oil services names (IEZ's beta against the S&P 500 is 1.35), these ETFs likely face more near-term downside. Patient investors can wait for better pricing to avail itself with IEZ and OIH. For more on ETFs, click

.