Schlumberger Retreats 4.5% From 36.00 Resistance As Bearish Signals Converge

Candlestick Theory
Schlumberger's recent price action shows a volatile short-term pattern. The July 1–2 rally formed two consecutive bullish candles (4.14% and 2.02% gains), breaching resistance near $35.00 on high volume, signaling strong buying momentum. However, the July 3 and July 7 sessions printed bearish candles with upper wicks (highs of $36.00 and $35.665, respectively), indicating rejection near the $36.00 resistance level. The July 7 candle closed at $34.95 after testing the day’s low of $34.51, forming a "bearish engulfing" pattern across two days and confirming $36.00 as firm resistance. Immediate support resides at $34.50 (recent swing low), with a critical psychological floor at $33.18 (June 25 low).
Moving Average Theory
The 50-day SMA ($34.75) has flattened after recent consolidation, with Schlumberger trading marginally above it ($34.95). The 100-day SMA ($36.50) and 200-day SMA ($39.40) remain above the current price, confirming a sustained long-term bearish trend. The narrowing gap between the 50-day and 100-day SMAs suggests weakening downward momentum, but the failure to breach the 100-day SMA on the July 2 rally reinforces it as dynamic resistance. A sustained close below the 50-day SMA may reactivate bearish sentiment, targeting the $33.18 support.
MACD & KDJ Indicators
The MACD histogram shows waning bullish momentum, with the MACD line (12-day EMA) converging toward the signal line (9-day EMA) after a brief positive crossover in late June. This divergence suggests slowing upward traction. The KDJ oscillator (9-day setting) exhibits a bearish signal: the %K line (15.2) crossed below %D (35.4) on July 7, while the J-line (-25.3) entered oversold territory. Although KDJ hints at short-term exhaustion, the MACD’s neutral stance advises caution against premature reversal bets.
Bollinger Bands
Bollinger Bands (20-day, 2σ) contracted sharply in late June, reflecting declining volatility before the July 1–2 breakout. Prices briefly exceeded the upper band ($35.75) on July 2, signaling overextension, before retreating to the midline ($34.80) by July 7. The bands remain parallel, indicating no imminent volatility surge. Current price proximity to the midline suggests indecision, with a close below the lower band ($33.85) required to signal oversold conditions.
Volume-Price Relationship
Volume surged 127% during the July 1–2 advance (18.9M and 16.1M shares), validating the breakout. However, the subsequent 27% drop in volume on the July 7 decline implies limited selling conviction, potentially preventing a steep correction. Notably, the June 24–25 sell-off occurred on elevated volume (24.5M shares), establishing $33.18 as a high-volume support zone. Sustained downside would require volume expansion to confirm bearish momentum.
Relative Strength Index (RSI)
The 14-day RSI (47.3) is neutral, retreating from near-overbought territory (68.4 on July 2) but avoiding oversold levels. While the RSI’s slope aligns with the recent pullback, the absence of extreme readings (<30 or >70) offers limited standalone signals. Confluence with other indicators—such as the KDJ’s oversold J-line—strengthens the case for consolidation rather than a deep reversal.
Fibonacci Retracement
Using the swing low of $33.18 (June 25) and high of $35.91 (July 2), key retracement levels are $35.27 (23.6%), $34.87 (38.2%), $34.54 (50%), and $34.22 (61.8%). Schlumberger held the 38.2% level ($34.87) on July 7, reflecting initial support. A break below this zone risks testing the 50% retracement ($34.54), where buyers may resurge. The 61.8% level ($34.22) aligns with the June 30 low, offering a robust floor.
Confluence and Divergence Insights
Confluence emerges at the $34.50–$34.87 support zone, where the 38.2% Fibonacci level, July 7 low, and 50-day SMA converge. A decisive close below this area would validate bearish momentum, targeting $33.18. However, the KDJ’s oversold reading and RSI neutrality conflict with the MACD’s bearish convergence, indicating fragmented signals. Volume divergence—reduced selling pressure during declines—further supports a range-bound near-term outlook. Probabilistically, Schlumberger’s failure to overcome the 100-day SMA and $36.00 resistance favors cautious bearishness unless $35.65 is reclaimed.