Risky Bulls In Oil Patch
Oil prices jumped on Wednesday after
two reports showed a sharp decline in U.S. crude inventories. U.S. crude futures
traded up 47 cents to close at $28.26. So what’s the word from oil stocks?
Two of the giants in field services — Schlumberger
(
SLB |
Quote |
Chart |
News |
PowerRating) and Halliburton
(
HAL |
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Chart |
News |
PowerRating) — have rallied sharply, forming
the right side of correction-recovery patterns. Perhaps too sharply. V-shaped
recoveries are prone to pullbacks.
Halliburton gained has advanced 15.5%
off its July 24 intraday low of 41 3/16. That move has taken the stock above its
mid level of around 46 3/4 and 50-day moving average. That’s bullish, of course.
However, let’s see the stock digest
these gains, then look for a pivot. Note how Halliburton closed near the low the
day’s range as sellers stepped into the rally, confining shares to a fractional
gain. I’d like to see a break on strong volume above resistance at 50 5/16 (see Point
A in the above chart).
Schlumberger gapped up 2 1/2 to 78 on
above-average volume. I’d like to see the stock trade sideways for a day or two.
After a pause, a possible pivot would be resistance at 79 1/2 (Point
A in the following chart).
