Action Alerts PLUS holding Schlumberger (SLB) has been slowly inching higher, in line with my update earlier this month, when I said, "A bottom is a process and not a point in time. As the process of a bottom in SLB rolls along, we could see a slight new low for the shares, but I do not anticipate significantly lower prices at this juncture. Ideally I would like to see SLB trade sideways for several months."
Let's see how this turnaround for SLB is progressing by looking at the most recent charts and indicators.
In this daily bar chart of SLB, above, we can see prices have rallied above the early August highs, which is an improvement. Prices have been strong enough to turn the slope of the 50-day moving average line positive. The On-Balance-Volume (OBV) line is not roaring away on the upside, but it has been climbing since late August, signaling more aggressive buying by longs. The trend-following Moving Average Convergence Divergence (MACD) oscillator is in a bullish mode above the zero line.
In this weekly bar chart of SLB, above, we can see a potential or possible double-bottom pattern. The pattern won't be "complete" until we rally above the 2017 high in the $85-$90 area. Prices are still below the declining 40-week moving average line. The weekly OBV line only a has a one-month history of moving up right now. The weekly MACD oscillator has crossed to the upside for a cover-shorts buy signal.
In this Point and Figure chart of SLB, above, we can see a longer-term rally potential to around $84.
Bottom line: Comebacks, turnarounds and bottoms take time. We might see a $71/$72 to $66 trading range over the next several weeks as SLB continues to build its bottom. Prices and investors could ignore my advice and just continue to rally, but there is some resistance around $72 and more around $78.