Here is the long and short on Schlumberger ($SLB) – December 9, 2022
SLB XLE OIH XOP TSLA CRWD CRM
Let’s look at Schlumberger ( NYSE: SLB ) here. This stock, along with so many other stocks in the energy space, had been working really, really nicely, very nicely. Since this breakout here, it ran up here and then pulled back.
If we just go back and look, at $40.00, when this stock broke out to a new high it ran really, really nicely for Schlumberger ( NYSE: SLB ), for SLB ( NYSE: SLB ), for Halliburton ( NYSE: HAL ). These things don’t move this fast, 37 percent in a matter of a month, that’s a pretty big move.
But then, if you look at what is happening to energy in general, ( NYSEARCA: XLE ), ( NYSEARCA: OIH ), ( NYSEARCA: XOP ), they’re all kind of doing the same thing. This is not where you want to be, we’ll say, energy has lost its energy (pardon the pun, that was really bad).
So what are we going to do here? Don’t buy Schlumberger ( NYSE: SLB ), right? Alright, that’s the end of it. No, not really. This is what you should consider doing, this is a decisive break below the 50-day moving average. I’m pretty sure what this is not going to do is that. Stocks like this don’t do that, some stocks do but just not this one. What I am expecting is, maybe the stock has another down day, maybe it has one more. But ultimately, I think you will see this stock start to run back up.
Just like you saw here with Tesla ( NASDAQ: TSLA ). The same thing, it fell, it broke hard, and then it’s running up. Crowdstrike ( NASDAQ: CRWD ), has the same deal. It falls down and then it comes back up. CRM ( NYSE: CRM ), fell here, drifted a little bit, and now it’s trying to come back up. If we look at Schlumberger ( NYSE: SLB ), you have got to expect the same thing. And that is, see the stock, at some point, start to come back higher.
Now, this would be my trade, when the stock comes up here, hopefully, it will, it will get closer to $50.00, and when it does, the stock comes up very close to $50.00, and then the first time it starts to do that, come up and then starts rolling over, that’s actually when you want to short the stock. And you can short the stock there and then what you would be doing in order to cover your “asterisk”, you want to make sure you’re not losing a bunch of money if you are wrong. You short the stock up here when it pulls off of the 50 and then you put a buy stop just a little bit above it.
That’s how I would be trading Schlumberger ( NYSE: SLB ). But you do want to be careful, it’s not in a downtrend, I would classify this as a broken stock. It is not badly broken, but it’s a broken stock, and I do think it is shortable, not from here but for a little bit higher level, if and when, then, it fails.
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