A quick note on SLB. $SLB

I wanted to highlight one Oil Service stock today even though we all know the energy sector is in the dog house with this administration and the potential restraints on the energy sector as a whole (XLE). Basically, the unknowns are still very much unknown. But after noticing the oil service group starting to perk up the past two weeks, I focused on watching SLB. Every time the energy group, and in particular, the service group would try to rally, SLB was making new highs first and would sustain those gains under most conditions. Even with the crude and $SPX choppy / weak action. I usually gauge this group (OIH) with the major oil plays like CVX, XOM and COP and have noticed that SLB and many Oil Service stocks have shown some nice relative strength. Even dips are bought up quite aggressively. But we are capped at resistance now across the OIH sector and we must see how they act under a pull back scenario. I ‘m talking about a real market pull back towards 1375 possibly?

I’m not ready to get long this group or SLB yet, but it I’m trying to build the case for a play in SLB for early next year and will observe it all month and compare the action to the following : XLE, XLB, OIH, $SPX.

SLB- Lightspeed

SLB- Lightspeed

We see from the chart above that SLB had a bad fall off a specific H & S pattern early in November. Lows were around 66.80. The small up-trend has the resistance level between 72 and 72.5. The trend shows nice higher lows practically daily and as I mentioned above, SLB is bought first and it  can move fast to test daily range highs. This small up-trend is  early, but showing signs of working off excess resistance from the November breakdown.  The price is at congestion of the major moving averages as seen in the chart but the RSI is showing strength still. Two higher resistance levels stand out for me. They are 74.75 and 76.60’ish. If SLB should breakdown below 69.40 and close  it can easily test the low ranges of early November and potential another larger leg down to 66-65 levels.

OIH- lightspeed

The Oil Service ETF (OIH) is a mirror image of SLB. It seems there are some early signs  support the evidence of a group play and if I would pick one name, it would be SLB.

Nick Pirraglia

Disclaimer: The material provided is purely for educational purposes only. No information contained herein is a solicitation or offer to buy or sell any securities. The information provided is in no way investment advice from Nick Pirraglia, TradersThinkTank or any other contributed content. The opinions, analysis and commentary on this website are purely the subjective views of the author. Nick Pirraglia is not a Registered Investment Advisor and under no circumstances should any content from this site be used as investment advice, recommendations, or trading advice. Please consult your financial advisor prior to making investment decisions.

About Nickolas Pirraglia

Nick Pirraglia started his career in trading in 1991 after returning to the US as an Army Officer deployed in Iraq. He began as a bond broker and worked his way into trading. Expert mentoring, hard work and a disciplined approach to the markets has allowed Nick the ability to maintain a very successful career in Capital Markets and Trading for over 20 years as a professional OTC Market Maker and independent trader. Nick has also managed the trading desks for a two Dallas based capital management companies and traded equities for a Dallas based hedge fund. Nick has trained and mentored thousands of customers in the rigors of trading, technical analysis and risk controls. Recently, Nick had broadened his market experience through the design and product management of two automated trading platforms. He has the pleasure of working with some of the brightest minds in the trading community and has collaborated with experts in data, design, engineering and trading psychology. An avid long distance runner, Nick completed several marathon events, qualified for the Boston marathon, completed several long distance Triathlons to include finishing a full Ironman triathlon.
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