Oil services provider Halliburton Company (HAL) is trading at a five-week high in Monday’s pre-market after beating the second quarter of 2020 profit estimates by a wide margin, and coming up short on revenues. Earnings per share (EPS) of $0.05 has defied expectations for a $0.12 loss, while revenues fell stomach churning 46.1% year on year to $3.2 billion, below estimates of $3.35 billion. The collapse of U.S. oil production supported the shortfall generated by erratic second quarter re-opening efforts.
- Halliburton Company (HAL) topped second quarter earnings expectations, reporting a profit of $ 0.05 per share.
- The stock is down nearly six years before the first-quarter decline.
- The positive post-news reaction raises the chances for a rally up to resistance near$16.
- The oil services sector benefiting from the rising price of crude oil.
The oil services sector has struggled for years before the pandemic, with a high debt load and poor management undermines the profitability. This stock topped more than six years and had already fallen more than 60% before the markets collapsed during the first quarter of the fight against the pandemic stop. The subsequent collapse left the former blue chip more than 80% of the January high before finding support at the lowest since 1972.
Crude oil futures have posted impressive gains since the month of April, lifting in the resistance in the low $40, while laying a recovery of waves in all kinds of energy reserves. However, most are still below key levels broken this year, and Halliburton is no exception, stuck between support at the 50-day exponential moving average (EMA) and the resistance at the 200-day EMA. It has also failed to reassemble the broken 2008 low in the teens, keeping the bears in full control of the ticker tape.
An exponential moving average (EMA) is a type of moving average (MA) which puts more weight and importance on the most recent data points. The exponential moving average is also known as the exponential weighted moving average.
Halliburton Long-Term Chart (2006 – 2020)
The stock has broke above the 2006 high of $41.99 in 2008, and has recovered quickly in the middle of$50. He has sold a five-year low during the economic collapse and turned it into a strong increase at the end of the year, achieving a return in the state of the high in 2011. The subsequent escape has failed, which gives a more 2012 bottom, followed by a more successful effort in 2014, when a strong recovery of the pulse displayed a record high of $74.33.
A massive sale in the middle of$20 in 2016 completed, a trading range that broke to the downside in the second quarter of 2019. The price action held above the deep-2008-down in February 2020 distribution that has found support just below the 2002 low in the depths of single digits. The second quarter rebound barely registers in this long-term perspective, drop-out of 20 points below the 200-month EMA, which has been broken on heavy volume in the fourth quarter of 2018.
Halliburton In The Short-Term Chart (2017 – 2020)
View daily highlights multiple resistance levels broken in recent years. The stock is currently trading right on the top of the 2008 low, to complete the second month of a testing process, which should allow the determination of short-term price direction. A purchase of spike right here will be the trigger for a more major buy signal if the price can climb the 200-day EMA at$ 16, but the reward potential will remain limited due to also strong barriers at $21 and$ 27.
The balance volume (OBV), the accumulation-distribution indicator offers hope to the battered bulls, lifting, back in mid-2019 levels in the second quarter. He has been pushing against the barrier for the past three and a half months, raising the odds for an escape, which predicts prices will soon follow. The stock has been trading in the mid$20 when OBV topped last year, so the rise has the potential to reach the broken the 2010 low just above $21.
On balance volume (OBV) is a technical trading momentum indicator that uses volume flow to predict changes in stock prices. Joseph Granville the first to develop the OBV tons in 1963 book Granville’s New Key to stock Market Profits.
The Bottom Line
Halliburton stock is trading higher after a mixed second quarter earnings report and may now test the moving average resistance near$16.
Disclosure: The author held no positions in the aforementioned securities at the time of publication.