Zacks.com Expert Watch highlights the following stock: Schlumberger.

Business Editors

CHICAGO--(BUSINESS WIRE)--March 24, 2004

As the market enters its sixth week of correcting, the Experts are asking two questions; have we seen the top? And what will be the effects of geopolitical events? Read the full Experts Watch article with commentary and recommendations on Schlumberger Ltd. (NYSE:SLB); go to; http://at.zacks.com/?id=101

Here are the highlights from the Experts Watch column:

28% earnings growth in the 4th quarter of 2003 delivered strong rallies throughout the end of last year and in the opening part of this year. All three indices' highs for 2004 to date occurred in mid-February. The correction, which began in the days after, shaved 7% off the NASDAQ, and a more modest 4.14% and 4.36% off the Dow Jones Industrial Average and the S&P 500 respectively. What was expected to be a healthy period of digestion is turning into a serious test of support levels as disappointing jobs numbers and geopolitical events have added a very bearish tone to its movement.

Adam Oliensis, editor of the Agile Trader, thinks the market is in the process of putting in a serious capitulation low. Oliensis observes a very tight correlation between the 20-day moving average of the Put/Call ratio on the S&P 500 and the price movement on that index. The 20-day moving average on the P/C ratio is currently around 0.84. Once it reaches 0.90, Oliensis would expect a clear capitulation and turning point on the index.

Even more troubling are trends that Bernie Schaeffer, editor of Schaeffer's Master Portfolio sees with the 10,700 mark on the Dow Jones Industrial Average. On February 17th, the Dow crossed that mark, closing at 10,714, though it hit an intra-day high of 10,764 on February 18th. Schaeffer noticed that this failure very closely parallels the March 2002 peak at 10,673 and the July 2001 peak at 10,679. Each previous attempt at those levels was followed by a precipitous fall on the Dow Jones Industrial Average. Of particular concern for Schaeffer, though, is that the 10,764 level is just shy of the 10,796 number, which would have been a 50% Fibonnaci rally off the bottom set in October 2002 at 7,197.

Bernie Schaeffer initiated a long position in Schlumberger Ltd. (NYSE:SLB). There is much pessimism toward the oil services sector. The Fidelity Select Energy Services fund declined a modest 7.6 percent over the past year despite the fact that adjusted assets decreased by 22 percent. Since 1997, the net asset value of this fund has increased by 10 percent while assets have declined by 67 percent. This means much of the fund's net asset value decrease can be attributed to investors withdrawing assets from the fund rather than decreases in the fund's holdings. Furthermore, the fund's volatility has been relatively low in the past year, which suggests the opportunity for a big move exists in this sector, based on its previous movements. The sector's Schaeffer's put/call open interest ratio (SOIR) is higher than 95% of all readings taken over the past year. According to Zacks.com, about 58% of the analysts have a "hold" or worse rating on the sector as a whole.

Dennis Slothower, editor of Stealth Stocks, is very conscious of the uncertainty that pervades the market at present. In fact, he thinks that the geopolitical environment is one of the only factors that is forcing the market to continue its oversold condition. When bombs detonated in Madrid, an advanced industrial democracy, added a great deal of consternation to investors. An attack on the European mainland is second only to an attack on the United States, and the implications that were played out in the Spanish election is very disconcerting as we quickly approach our own presidential election. Slothower says that the apparently al-Qaeda inspired attacks could result in a concerted effort to execute an attack on the American homeland near or around November.

Read the full report with insight from the experts at Zacks.com: http://at.zacks.com/?id=102

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