There are numerous ways to view a Resistance line on a stock chart, and one that I particularly like is “the line in the sand”. Crossing over this “line” seems to create a lot of additional Bull/Bear tug ‘o war action – which is a very healthy component to the market.
Today I noticed one such “line in the sand” near the $80 price level when viewing this Weekly chart of $SLB (Schlumberger):
- found support at this line in January 2011
- came back for a test in July that year
- It then tested & breached below in August, a month later
- A few pokes up at it from below but then really melted into October
- Price was not able to get back for a test until February 2012 with one poke above it – but finishes with a close right on it.
Now price is making a run up to test it again after breaking back over the 65 day moving average. Note the Volume at Price just under price here, a great floor.
What is your trade here?