Helmerich & Payne Inc. (HP) was one of five stocks I favored back in early 2016. In writing about the provider of contract drilling services, we stated at the time, "Traders and investors could use the current pullback in HP to do some initial buying. The chart would not look as attractive if we saw a close below $50, so that is the risk point for me. Additional buying can be done on a close above $65, adding to a winning position."
Looking back to May 2016 (look at the weekly chart below), we can see that our strategy was profitable as prices touched $85 by the end of the year. In the past 12 months HP has retreated to the lows of early 2016 and the charts look attractive again. Let's check them out.
In this daily bar chart of HP, below, we can see that prices are above the rising 50-day moving average line and the still-declining 200-day line. The 50-day line soon could cross above the 200-day line for a bullish golden cross. The On-Balance-Volume (OBV) line declined until late August, telling us that sellers were more aggressive. However, the line has been rising the past three months, telling us that buyers of HP are now more aggressive. The daily Moving Average Convergence Divergence (MACD) oscillator is above the zero line and is likely to turn higher for a fresh go-long signal.
In this weekly bar chart of HP, above, we can see that prices could be making a very large double-bottom pattern. Prices are above the still-declining 40-week moving average line. The weekly OBV line has been rising the past three months and the MACD oscillator is close to crossing above the zero line for an outright go-long signal.
In this Point and Figure chart of HP, above, we can see a base pattern since May (look for the "5" on the chart). A trade at $61 is a fresh breakout and we can see a $77 price target.
Bottom line: With a rising 50-day moving average line and a rising OBV line, I like the long side of HP. Aggressive traders could go long on a close above $60 looking for gains to the $75-$80 area. Risk a close below $53.
