By Nicholas Santiago on March 17th, 2010 3:54pm Eastern Time
The two major energy drilling and exploration stocks are Baker Hughes Inc (NYSE:BHI), and Schlumberger Limited (NYSE:SLB). While these are the two leaders in the sector, investors want to know which stock looks better than the other at this time?
The winner of the two stocks at this time would have to be Baker Hughes Inc. The stock has rallied since December 9, 2009 when it was trading at 38.00 a share. The stock is now at 48.00 and holding up relatively well. Technically speaking on the charts the stock is trading above its daily 50 and 200 moving averages which is indicating a strong uptrend. Baker Hughes Inc is above the 50.00 level and it is likely to meet chart resistance at 55.00. Therefore the stock would have upside potential of 6 percent if the stock continues to trade higher.
Meanwhile, Schlumberger Limited started to rally in late February. The stock is still below its January high at 72.00 which is a sign of weakness relative to the S&P 500. However, Schlumberger Limited is above its daily 50 and 200 moving averages which is technically strong. The stock should face good resistance at the 67.50 – 68.00 level. Should the stock clear 70.00 it could reach its double top at 72.00. Therefore, the upside potential from a move above the 70.00 level is 3 percent.
Here you can see and judge for yourself which is the best risk reward of two different stocks, in the same sector. While both stocks are in a short term technical uptrend, Baker Hughes Inc still looks like the better trade at this point.
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