Earlier this month, Halliburton (HAL) broke out through resistance around $46. Prices popped to $50 and are pulling back now. I would use this replacement to the breakout area to get long as I anticipate higher prices for HAL in the months ahead.
This pullback (see the chart below) looks like many other pullbacks I have seen over the years. HAL rallied sharply for two consecutive days and then the next eight days have been spent correcting that sharp run up. If it takes eight days to retrace a two-day rally, it shows you that traders are using the weakness to buy. If traders were not buying the pullback, then prices would come back down a lot quicker, I believe.
In this daily chart of HAL, above, we can see prices are above the 50-day and the 200-day moving averages. The On-Balance-Volume (OBV) made its low in January and rose until early June. For the past five months, the OBV line has moved sideways. During October, the OBV line on HAL moved higher and then lower, in step with prices. The Moving Average Convergence Divergence (MACD) oscillator, in the lower panel, generated a liquidate-longs sell signal.
In this weekly chart of HAL, above, we can see a possible inverse head-and-shoulders base pattern. If we want to keep an open mind, we could say the bottom pattern on HAL goes back to the end of 2014. A breakout from a two-year base pattern could support an advance that carries into 2017. Prices are above the rising 40-week moving average line. The weekly OBV line has been moving up this year and mirrors the base pattern. The MACD oscillator is about to signal an outright buy for HAL. Depending on how you draw the neckline to this inverse head-and-shoulders bottom, you could come up with a price target for HAL around $65 or so.