The recent rally in the oil services sector (OIH) which we highlighted yesterday has also lifted the silica sands producers which supply the oil industry. The ‘big dog’ in the silica space, US Silica (SLCA), has rallied nearly 60% in the space of just one month!
SLCA (Daily)
The ~$21 level is an area of previous support that could turn into the first resistance zone on the way back up.
As hungry, debt-laden, U.S. shale oil producers strive to optimize their production levels amid the recent uptick in the crude oil price it makes sense that they will turn to increased use of proppants (silica sand).
While 2015 has been a very trying year for the oil sector as a whole, there have been a few gems if you look hard enough. One of our favorite names is a tiny Canadian based silica sand producer named Select Sands (SNS.V); this stock rallied 1000% in the span of a few months earlier in the year!
SNS.V (Weekly)
And we have recently started to see accumulation volume start to trickle back into SNS much like we saw at the beginning of the year before it launched into orbit. This is a name that we are keeping a close eye on and we are looking to publish a more in-depth update on SNS over the coming weeks.
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