SLB Chart – May 5, 2009

I drew the following chart of Schlumberger Ltd (NYSE: SLB) around 1:00 pm on May 5, 2009.  Disclosure: I sold an option strangle on SLB yesterday.

• SLB is trading near the high end of the trend line I drew of higher highs
• SLB is trading near the highs it reached in late November and early December 2008
• SLB is quickly approaching its 200 day moving average
• The 50 and 100 day moving averages had a bullish crossover last week
• Williams %R remains overbought where it could stay for a while still

Opinion = I expect SLB to stay between the horizontal lines I drew at $45.00 and $55.00.  Those were the edges of the strangle I sold.  The 200 day moving average will be big to watch for SLB.  If it gets over it, the bull run for SLB could continue.  Along with the horizontal line I drew at $45.00, the 50 and 100 day moving averages add to the area of support down there.  Not drawn here, but I could see $50.00 holding support too.