Schlumberger Upside Looming?

Published on Tuesday, 24 January 2012 19:42 Written by TradersHuddle Staff

New York, January 24th (TradersHuddle.com) - Shares of Schlumberger Limited (NYSE:SLB) ended the trading session higher by $0.43 or 0.58% from its previous close. Schlumberger's price action formed what is considered to be a bullish engulfing candle that could very well signal continuation of trend or reversal on ongoing weakness.

Schlumberger Limited (NYSE:SLB), through its subsidiaries, provides a wide range of services, including technology, project management and information solutions to the international petroleum industry as well as advanced acquisition and data processing surveys. The company operates in two segments, Oilfield Services and WesternGeco. The Oilfield Services segment provides a range of exploration and production services required during the life of an oil and gas reservoir. The WesternGeco segment provides reservoir imaging, monitoring, and development services, as well as operates data processing centers, and multiclient seismic library.

Schlumberger's recent stock range has been formed by a trough where calculated support was defined at $67.12 and by a peak that established the resistance level at $75.75, which could be used by traders planning their trades.

Traders wanting to establish a position in Schlumberger or traders that are already holding the stock can use the bullish engulfing pattern to their advantage. The pattern provides a defined risk as it shows where the bears were able to push the stock down, before the bulls stepped in.

The bullish engulfing pattern is a leading indicator that provides an alert to the bulls that the trend will continue or that there is an immediate reversal to the short term weakness seen on the stock. Below an Engulfing Bullish Candle Illustration: