timwest
Long

SLB bullish triangle and flag implies 10%-20% upside

BATS:SLB   SCHLUMBERGER LTD
1496 12 13
Massive 5-year triangle in SLB             shares has come to a conclusion because the trendline connecting the "highest lows" across the previous rally highs has been surpassed, suggesting that the selling pressure is off of the stock .

I noted four other previous rally's in SLB             pasted onto the most recent low for reference. I simply thought it was interesting to see how fast it has rallied at times in the past. This stock gets into momentum stages very quickly.

The recent breakout occurred from a multi-month sideways "box" or accumulation zone labeled in green. Old resistance levels existed that SLB             had to get through, but now that both resistance levels have been crossed, it appears that SLB             is set to grind out a rally to higher levels near 90, then 100.

I believe SLB             will outperform the market also, so if you plot this stock against the SP500             using SPY             , it may be important to keep an eye on SLB/SPY to make sure that ratio is plotting along too during the course of this rally.

Cheers.

Tim 3:29PM EST, Wednesday, Aug 28, 2013
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Chartaholic
3 years ago
Why wouldn't you draw overhead resistance above the higher highs and below the lower lows.... .I'm not sure that I agree that it has broken above resistance yet.....
+2 Reply
sublimares2 Chartaholic
3 years ago
That is one oblique resistances/ support and I agree with it. I would have another parallel resistance instead of the bullish flag top line but I suspect it was left out because is not tailoring the breakout from the ascending triangle. I do see a bearish crab pattern.
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timwest PRO Chartaholic
3 years ago
The standard trendlines are obvious - but what I am showing with the trendlines is the "internal" resistance level that gives a leading indication of when the obvious trendline will break. What I am trying to show is something different, which is a very non-standard way to look at things but it makes sense to me to compare how HIGH UP in a rally that buyers can maintain prices rather than WHAT IS THE HIGHEST PRICE that buyers can push a stock up to. The "Highest Low" is more interesting to me than the "Highest High" for that reason. It takes only 1 fool to pay the highest price on the day, but it takes often-times a hundred fools to be buying on the highest day or week. I want to know what the "hundred fools" are doing moreso than that 1 fool. Is that a fair answer to your question?
+1 Reply
timwest PRO timwest
2 years ago
I re-read this passage and I think I could make it more clear. "It takes only 1 fool to pay the highest price on the day, but it takes often-times a hundred fools to be buying on the highest day or week." So, what I am saying is that I want to know the highest "RANGE" in a rally, not the highest "HIGH" in a rally. So, I am more interested in knowing the highest LOW of a rally than the highest HIGH of a rally. The "highest LOWS" tell me more about a market's trend than the highest high.
+1 Reply
timwest PRO Chartaholic
2 years ago
I like your comment, but I've introduced this way of looking at trendlines to show that there are hidden ways to find when resistance has been overcome. It is typical to look at the tops of rallies to find resistance, but I look at the lowest buyers in the tops of the rallies and that is the "highest low". The concept is logical and it avoids expecting the upside-tails to happen all the time, which those usually require news or some exciting pop in the market. You can also look at the 5th highest low in the rally to really capture where the support is on a rally and to find when the buyers are amassing at the border ready to overtake the sellers and drive to higher prices. A simple weekly chart could do this also, but the daily will be more accurate. All the best Chartaholic. Thanks for the comment. Tim
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timwest PRO timwest
2 years ago
There is another explanation in case the first one wasn't clear enough.
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timwest PRO
3 years ago
SLB is reaching its target much faster than the slow-forecast I had put forth. The stock is moving along at the much faster, historically similar rallies labeled in green for reference. I could see exiting right here and/or tightening up the stop to avoid giving back the profit. I would also consider adding or re-entering on any 5%-8% dips in the shares on profit-taking.
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timwest PRO timwest
3 years ago
Note that the forecast for the next 6-9 months is for sideways action - so for those of you who own this stock for the long haul, consider selling long term equity anticipation securities (LEAPS) for an additional 10% return. January 2015 95 strike calls are nearly $9, for example. That caps your return to 1% additional gain while you receive $9/share in your account overnight. That may sound like a boring return and it is. Options give you so much flexibility to adjust your risk profile, but it can also give you paralysis by analysis. Either way - SLB was an excellent chart opportunity and with oil prices falling now to eight-week lows, it makes sense to walk away here and reinvest in other oversold areas - perhaps MRK and other non-cyclical stocks. 11:42AM 10/22/2013
+1 Reply
2use timwest
2 years ago
One can't even add anything to this now
Reply
Fantastic forecast
+1 Reply
timwest PRO Technician
2 years ago
Thanks Technician
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