We reviewed the charts and indicators of Schlumberger Ltd. (SLB) at the end of September, and we said: "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." With several more weeks of trading under our belts, we can see that SLB behaved weaker than anticipated, with a $70 to $61 trading range with lower highs, but with the $62-$61 area holding.
Let's review the rest of the charts and indicators, to see if this is still a base formation or a large continuation pattern.
In this daily bar chart of SLB, below, we can see that the slopes of both the shorter 50-day moving average line and the slower-to-react 200-day moving average line are bearish. The volume of trading since the middle of October has been heavy. Heavy volume and prices not moving to new lows is a sign or signal that positions are changing hands.
Aggressive sellers of SLB are meeting aggressive buyers. The On-Balance-Volume (OBV) line has been flat or neutral since the middle of October. In the lower panel of the chart is the 12-day momentum indicator, which shows higher lows from October to November compared to equal to slightly lower price lows. This describes a bullish divergence, and tells us that the rate of price declines has slowed.
In this weekly chart of Action Alerts PLUS charity portfolio holding SLB, below, we can see that prices are below their declining 40-week moving average line.
The weekly OBV line has crept higher in the past three months, and is giving some indication that buyers of SLB are being more aggressive. The weekly Moving Average Convergence Divergence (MACD) oscillator continues to rise/improve after a cover shorts buy signal in October.
In this Point and Figure chart of SLB, below, we can see a large consolidation pattern. A decline to $61.64 could weaken the chart, while gains to $66.74 are probably needed to turn things more bullish.
Bottom line: strength above $68 and $70 is needed to improve the chart picture. Investors should wait for a close above $70 before probing the long side. A close below $61 or $60 will keep the bear in charge.