Halliburton's Surging Stock Has Busted Out of a Base Pattern

 | Jan 23, 2018 | 9:13 AM EST
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Halliburton Co. (HAL) has not been covered in Kamich's Korner since August, when we wrote, "HAL does not present the strongest technical case for a reversal, but sometimes the market surprises us. That what keeps us on our toes and makes life interesting. Exercising a little caution, I would wait for two closes above $42 before trying the long side, risking a close below $39." With hindsight we can see that our strategy would have gotten you long HAL in September! With HAL trading $14 higher than our suggested entry price a fresh review is needed.

In this daily bar chart of HAL, below, we can see that prices made a base pattern from June to December. A "neckline" can be seen across $46 and this was broken in December. In December the slope of the 50-day moving average line turned bullish and HAL closed above the 200-day line. Earlier this month, the 50-day line crossed above the 200-day average for a bullish golden cross. Recently the slope of the 200-day line turned positive. The low of the On-Balance-Volume (OBV) line was in late August and a fresh up-move started at the end of November. The trend-following Moving Average Convergence Divergence (MACD) turned bullish in early December.

In this weekly bar chart of HAL, below, we look back five years to get more perspective. Prices are close to breaking above the highs of late 2016/early 2017. Prices are above the rising 40-week moving average line. The weekly OBV line has improved in recent months and the MACD oscillator is now bullish.

In this weekly Point and Figure chart of HAL, below, we can see that a trade at $58.06 will be a breakout and open the way for a possible price target of $79.

Bottom line: If you are long HAL I would raise sell stop protection to a close below $47 now to lock in some gains. Not long HAL but looking to buy? I would use any dip toward $54 and risk a close below $50. Add to longs on a close above $58. My longer-term price target is $80.

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