Aggressive Traders, Take a Look at Schlumberger

Schlumberger (SLB) has been in a slump over the past three months, declining to around $74 from near $88 in January. Prices are retesting the lows of September and June. This could be when timid investors stand aside, but a gap to the downside last week (Friday) saw heavy volume. This kind of gap or price void could be an exhaustion gap.

Exhaustion gaps tend to come at the end of moves up or down. On the downside, a stock declines and declines, and traders hang on and on. They continue to hold their positions, despite the downtrend. Late in the trend, these stubborn longs "throw in the towel" and reluctantly dump their underwater positions. This belated urge to sell produces the heavy selling and the gap. Often times, after this heavy selling is out of the way and others, with a longer-term time horizon have absorbed the selling, the stock stabilizes and begins to move in the opposite direction....401 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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