"Schlumberger Limited (SLB) is the world's leading oil services company, assisting in exploration, production and most other oil services; its operations include being a leader in applying proprietary technologies to extract hard-to-extract oil and gas," says Michael Shulman.

The editor of The Short-Side Trader suggests, "Let's ask ourselves the following question: Over the next year is the there going to be more, less or an equal demand for oil? The answer is clearly more demand.

"Another question: Over the next year is there going to be more, less or an equal supply of oil?

Oil and natural gas servicer Schlumberger (SLB), which I first wrote about on May 6, 2009, at a price of $56.09, continued to break new ground this winter, rising from about $74 to near $96, before pulling back to $87. Hence, if you haven't already, now would be a good time to consider taking some profits off the table.

Further, I'd raise the sell/stop loss to $67 from $64 at this stage.

However, those investors who can tolerate the risk can maintain their full position and go for an even bigger gain, as SLB is likely to push toward $110 by the end of 2011.

"Oil had a good year in 2010, rising 15 percent, and 2011 looks to be even better, as a stronger global economy pushes demand for resources higher," says Stephen Leeb.

The editor of The Complete Investor explains, "Oil service and equipment companies are the most leveraged way to play rising oil prices. Here's a look a Schlumberger (SLB) and National Oilwell Varco (NOV).

"First is Schlumberger, operating in more than 80 countries. The company is the world's leading supplier of energy technology, project management, and information solutions.

"The oil services and equipment industries have been a hotbed of M&A activity over the past few years, a trend that should continue into 2011," says energy sector specialist Elliott Gue.

The editor of The Energy Strategist explains, Three of my top 10 takeover plays hail from this part of the energy patch: Core Laboratories (CLB), Dresser-Rand (DRC) and Dril-Quip (DRQ).

"With a market capitalization of more than $100 billion, Schlumberger (SLB) should add to the dozens of acquisitions it's closed over the past few years.

On Friday, oil field giant Schlumberger (SLB) posted a 31% profit for the fourth quarter, as reported in the Wall Street Journal (subscription required). Earnings rose to $1.04 billion, or 76 cents per share, from $795 million, or 65 cents per share, a year ago.The acquisition of Smith International contributed revenue of $2.49 billion and earnings of $275 million in the quarter.

CEO Andrew Gould said that an increase in global demand should drive growth in deepwater drilling around the world and revive onshore activity.

U.S. stock futures are higher Friday morning after General Electric (GE) reported upbeat quarterly results. Google (GOOG) also reported better-than-expected quarterly earnings after the Thursday's closing bell. Futures on the Dow Jones Industrial Average gained 26 points to 11,800 and S&P 500 futures rose 4.50 points to 1,281. Nasdaq 100 futures gained 6 points at 2,288.

A Peek Into the Global Markets

Positive sentiment ruled the European markets today. STOXX Europe 600 Index has gained 0.78% and London's FTSE 100 Index moved up 0.57%.

Oil/natural gas servicer Schlumberger (SLB), which I first wrote about on May 6, 2009, at a price of $56.09, continues to move higher, so if you haven't already -- now would be a good time to consider taking some profits off the table.

Further, I'd raise the sell/stop loss to $63 from $57 at this juncture.

However, those investors who can tolerate the risk can maintain their full position and go for an even bigger gain.

The shares of oil/natural gas servicer Schlumberger Limited (SLB), first written about here on May 6, 2009, at a price of $56.09, have vaulted higher this fall, from about $59 to $80. Now would be a good time to consider taking some profits off the table.

However, those investors who can tolerate the risk can maintain their full position and go for an even bigger gain.

The removal of the U.S. deepwater offshore oil drilling moratorium and an oil price that never seems to dip for too long -- it's averaged better than $70 per barrel for months -- spell good things for Schlumberger, and institutional investors have piled in to the stock.

Silver futures are recently trading near 30-year highs. iShares Silver Trust (SLV) December 31 and January 35 calls are active on overall call option volume of 180K,(73K puts). Option implied volatility of 43 is above its 26-week average of 35, according to Track Data, suggesting traders are pricing in large movement.

Schlumberger (SLB) volatility has decreased as shares have trended to 27-month highs. Crude oil futures are recently up 0.59% to $88.31, according to Bloomberg. Overall option implied volatility of 32 is below its 26-week average of 35, according to Track Data, suggesting decreasing price movement.

Options Update is by Stock Specialist Paul Foster of theflyonthewall.com.

Analyst Upgrades

• Macquarie upgraded Intel (INTC) to outperform from neutral and Advanced Micro (AMD) to neutral from underperform.
• Pfizer (PFE) was upgraded to outperform from market perform at Bernstein.
• Capstead Mortgage (CMO) was upgraded to outperform from market perform at FBR Capital.
• Oppenheimer upgraded Halliburton (HAL) to outperform from perform.
• Gilead (GILD) was upgraded to outperform from sector perform at RBC Capital.
• Skilled Healthcare (SKH) was upgraded to outperform from market perform at JMP Securities.
• Citigroup upgraded CapitalSource (CSE) to buy from hold.

With the United State having lifted its offshore drilling moratorium, it's reasonably safe to consider oil servicer Schlumberger Ltd (SLB), first written about on May 6, 2009 at a price of $56.09. SLB took it on the chin this summer, falling from $74 to about $51 with much of that plunge related to offshore sector uncertainty following BP Plc.'s (BP) massive Deepwater Horizon spill.

SLB has also announced it will buy Smith International (SII) for about $11.4 billion, subject to approvals -- a deal that will be slightly dilutive in 2011 but accretive in 2012.

Market Vector Gold Miners (GDX) closed down 15 cents to $56.51. Gold is recently up 0.18% to $1,310.70. Put volume is outpacing call volume on a two to one ratio. Overall option implied volatility of 29 is below its 26-week average of 34, according to Track Data, suggesting decreasing price movement.

Schlumberger (SLB) closed up $1.23 to $61.52 as crude oil futures rally 2.35% to $77.97. Calls are three times as active as puts. October put option implied volatility is at 28, November is at 33, January is at 34, versus its 26-week average of 35, according to Track Data, suggesting decreasing near-term price movement.

Update is by Stock Specialist Paul Foster of theflyonthewall.com.

Schlumberger Ltd (SLB), first written about on May 6, 2009 at a price of $56.09, has taken it on the chin in the past six months. Most of the slide stems from uncertainty regarding the status of U.S. deepwater offshore drilling following the massive Deepwater Horizen oil spill in the Gulf of Mexico this summer, and the consequent moratorium on deepwater drilling (note: The moratorium is scheduled to be lifted November 30, 2010.)

To be sure, global demand for oil and natural gas will increase in the years ahead, and so will demand for deepwater expertise, but the question market regarding the U.S. market represents too much risk, even given Schlumberger's substantial international business.

"Schlumberger Limited (SLB) is the biggest oil services company, hands down. As such, the firm's operations extend into just about every imaginable oil or gas-producing region of the world," says energy industry specialist Elliott Gue.

The editor of The Energy Strategist asserts, "The company, in our view, is in the sweet spot of the oil-services cycle.

"Despite Schlumberger's exposure to the Gulf, the hit to the company's bottom line shouldn't be too dramatic, nor will it affect long-term growth prospects. At this valuation the stock already prices in these headwinds.

"There will be short term anomalies in oil prices; but long term, the world's appetite will increase as supply decreases," says resources expert Curtis Hesler.

The editor of The Professional Timing Service explains, "There is an acceleration phase coming in these markets that will be suddenly set off by a surprise incident. The time to invest for that eventuality is during market weakness when fear is the ruling emotion.

"My favorite major is Apache Corp. (APA). The stock is trading under our downside buy price of $95, and there should be some support at $80. If you are going to own a major oil producer, Apache is the one.