Schlumberger Ltd (NYSE: SLB) Testing Support Says Market Timer Frank Kollar

August 5, 2008 (FinancialWire) (By Frank Kollar)

Shares of Schlumberger Ltd (NYSE: SLB) took a substantial hit in trading on Monday, August 4 as oil service companies across the board lost ground. Schlumberger shed some 5.8% closing at $94.41.

But for all the selling, Schlumberger is holding its own and only lost ground because of news events with oil prices dropping and a Fed meeting around the corner.

The chart paints the picture of a stock that has tested its 50% retracement level two times now over the past month. That level, at about $92.00 a share, has held at every attempt with this week being the third attempt to close below it.

Just below this support level is the critical 61.8% support at $87.30.

If Schlumberger holds here and we see a reversal to the upside from current levels, it will make a good long trade using a stop below $92.00. Schlumberger has the potential to reach $110.00.

A close below critical support at $87.30 though would likely be followed by considerably lower lows, down to $80.00 a share. A short trade on a break of critical support would be riskier, but still potentially profitable.

Kollar is editor and chief analyst at FibTimer.com (http://www.fibtimer.com) which offers market timing strategies for S&P and Nasdaq index fund traders, as well as bond, gold, small cap, sector, ETF and stock trading strategies.

Kollar’s research has shown that the financial markets are in tradable trends approximately 80 percent of the time. FibTimer strategies define trends and trade them in both advancing and declining markets. Caring nothing about what newscasters say or what the latest economic indicator predicts, trends are where the profits are, and that is where FibTimer is.

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