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Is Schlumberger Setting Up for a Selloff?

Is Schlumberger Setting Up for a Selloff?
March 15
21:24 2016

Schlumberger (SLBGet Report) have been trading in a very narrow range for nearly a month. This tight action began shortly after the stock’s big rebound off the January lows ran out of steam. Schlumberger has been struggling with heavy resistance near the $75 area during the current consolidation. As the process rolls on, the stock is beginning to look vulnerable to a deep pullback.






In the near term, Schlumberger bulls should keep a close eye on the $72 area. A close below this key level could spark a significant selloff.

Schlumberger’s early December breakdown caused a great deal of damage. The first leg of the selloff stalled near the 2015 lows, allowing shares to mount a minor rebound. When January opened, a second leg began, nearly doubling the drop from the December high. By the middle of the month, Schlumberger had fallen over 24% in just six weeks. This final leg drove shares well into oversold territory, setting the stage for a healthy recovery move.

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By late February, Schlumberger had rallied all the way back to the November lows, recovering nearly all of the December collapse in the process. This was about as high as shares would climb. Over the last three weeks, Schlumberger has been struggling with heavy resistance near the November lows while volume eased dramatically. Now with a heavy overhead 200-day moving average in play, this appears to be gaining strength.

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If Schlumberger is unable to hold its current March low of $72.12, trouble could quickly begin. Investors should expect a drop down to the key support near the $68-to-$66.50 area. This zone includes the stock’s 2015 low set back in October as well as the August low. In between is the December bottom of $67.15. A base in this area could develop in to a low-risk buying opportunity.

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1 Comment

  1. johny
    johny March 16, 15:16

    Now Schlumberger will be hit from all sides, this is the reward for their attitude to the clients and to employees. They are loosing jobs because of their arrogance and high prices. They had an advantage with directional divisions, one was high tech D&M and athfinder (low cost) wich in this times could have lot of activity, but they closed it, most probably to force clients to get high price division from them. Also they have lots of lawsuits with employees, all over the world, which most probably will loose them and they will have to pay overtime ….The future does not sound good for Schlumberger.

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