When asked about Transocean (RIG) in the 'Lightning Round' of Mad Money last night, Jim Cramer replied, "I don't like offshore drilling, it's been a real loser. But if you want offshore drilling, go with Schlumberger (SLB) ."
Let's check out the charts.
In this daily bar chart of SLB, below, we can see that prices have eroded from a high back in May. SLB made a low in late December and has shown some improvement. Prices are above the bottoming 50-day moving average line but still well below the declining 200-day line. The trading volume was heavy in December as prices reached a low point but it has weakened the past six weeks. A pattern of increased volume would be the bullish picture.
The daily On-Balance-Volume (OBV) line shows a rise of about one week followed by a sideways trend - again, the bullish picture would have been a rising OBV line telling us that buyers were acting aggressively.
The Moving Average Convergence Divergence (MACD) oscillator is still above the zero line but it has crossed back to a take profits sell signal - not real encouraging.
In this weekly bar chart of SLB, below, we can see that prices have been weak for two years and on this time frame there is little improvement on the chart. Prices are well below the declining 40-week moving average line.
The weekly OBV line shows an "uptick" but not an uptrend.
The weekly MACD oscillator has crossed to the upside from below the zero line for a cover shorts buy signal but the zero line is a long way off.
In this Point and Figure chart of SLB, below, we can see a small upside breakout and an upside price target of $50.
Bottom line strategy: SLB could rally back to the low $50's but I cannot make a case for more than that at this time.