Viewers of Mad Money love the "Lightning Round" segment of the show. This is when callers ask Jim Cramer about stocks they are interested in. On Wednesday, one viewer asked about Schlumberger (SLB) : "I'm not a big fan of Schlumberger anymore," responded Cramer.
Let's see what the charts of SLB look like.
In this daily bar chart of SLB, below, we can see how prices declined sharply from January to March. SLB made a low with the broad market in March and then managed to double in price from the low in just a few months. The gains did not last and prices retreated into late October.
The recent price recovery shows some improvement in the indicators. Prices are trading above the rising 50-day moving average line which is ready to cross above the declining 200-day line for a bullish golden cross.
The daily On-Balance-Volume (OBV) line shows a little improvement the past six weeks suggesting that buyers of SLB have finally become more aggressive.
The Moving Average Convergence Divergence (MACD) oscillator has moved above the zero line for a buy signal after several months of hugging the zero line. An improvement.
In this weekly bar chart of SLB, below, we can see that prices have been in a long decline from early 2018. Not pretty and a reminder it does not pay to fight the trend.
SLB has recently rallied above the now bottoming 40-week moving average line. This is a good sign but more base building is likely.
The OBV line shows a turn up in recent weeks and the MACD oscillator is now close to crossing the zero line.
In this daily Point and Figure chart of SLB, below, we can see that prices have met and exceeded the upside price target in the $20 area.
In this weekly Point and Figure chart of SLB, below, we can see that the $43 area is a potential longer-term price objective.
Bottom line strategy: The various indicators we favor have improved but the big decline SLB suffered from 2018 means a much bigger base formation is needed. The weekly Point and Figure chart shows an attractive price target but more sideways consolidation is likely in the months ahead.
