By Chuck LeBeau, director of analytics at

Stocks in the oil services industry suffered more than most stocks in 2008 as they were hit by a falling stock market combined with an even sharper fall in oil prices.

This "double whammy" knocked Schlumberger ( SLB - Get Report) from a July 2008 high of $111.05. After triggering an important sell alert at $94.53 the stock continued on down to a low of $35.05 in February. However SLB has already recovered to above $40, up 17% from the February low. In the meantime optimistic option players have been loading up on thousands of SLB call options at the $50 strike price. The current sell alert on SLB would be triggered if the price reached $37.47.

Halliburton ( HAL - Get Report)one of the world's largest providers of products and services to the energy industry, fell from a July 08 high of $55.38 to a November low of only $13.46. (A protective sell alert occurred at $45.46.) Halliburton recovered to above $20 in February but then weakened and triggered a recent SmartStops sell alert at $16.61 and is now trading below $16 and appears to be headed lower.

If the world economy recovers then oil prices would be expected to recover and the oil services stocks would be benefitting from both a recovering stock market and a recovery in oil prices. However under present circumstances the demand for oil rigs and services is down and is expected to be weak through at least the second quarter. Oil prices might also benefit if there were any prolonged weakness in the U.S. dollar as a result of massive amounts of deficit spending. Other oil service companies include Baker Hughes ( BH - Get Report), Nabors Industries ( NBR - Get Report), Patterson- UTI Energy ( PTEN - Get Report), and Weatherford International ( WFT).

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