OUTLOOK

"Oil Stocks are Overbought and Due for a Correction"

4/23/2008

Since turning bullish on Oil Stocks in our Outlook on 3/24/08, the XOI index has advanced from a close of 1339.20 on 3/24/08 to a close of 1502.58 on 4/23/08.

We believe that Oil Stocks have rallied too much too soon and are due for a correction.  Within the next 4 weeks, we expect to see the XOI index decline below 1450.

Mark Yuan, CFA