Don't Ignore This Chart

Schlumberger Springs a Bear Trap with Big Volume

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Schlumberger (SLB) broke support with a surge in volume, but this support break did not hold as the stock surged with strong volume the last two weeks. The decline below 62 looks like a selling climax because of high volume and the gap down. The surge in volume flushes out of the sellers and paves the way for a bounce. SLB got its bounce with a two week surge that exceeded the 50-day EMA today. Notice that volume was above average five of the last nine days. I am not counting today's volume because the day is incomplete. Despite early signs of a bottom, the overall trend remains down with resistance marked in the 69-70 area. A breakout here is needed to fully reverse the long-term downtrend. 

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Arthur Hill
About the author: , CMT, is a Senior Technical Analyst at StockCharts.com. He has written articles for numerous financial publications including Barrons and Stocks & Commodities magazine. Focusing predominantly on US equities and ETFs, his systematic approach of identifying trend, finding signals within the trend, and setting key price levels has made him an esteemed technician. In addition to his CMT designation, Arthur holds an MBA from the Cass Business School at City University in London. Learn More
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