Halliburton (HAL) reported their latest earnings figures this Tuesday morning. The report was mixed with a small EPS beat and a revenue miss. Let's check out the charts and indicators of HAL as they are forward looking.
In this daily bar chart HAL, below, I can see that prices have had a "problem" in the $42-$44 area. First time in April and then again in June and now in January. Is there a fundamental seller in that area? Prices are trading above the 50-day moving average line but the average line is cresting now. HAL is trading above the rising 200-day line.
The On-Balance-Volume (OBV) line shows a rise from late September with a minor peak in January.
The Moving Average Convergence Divergence (MACD) oscillator has made a lower high when compared to November and this creates a bearish divergence when compared to the price action where prices made a higher high. Bearish divergences are wake up calls that something different is going on.
In this weekly Japanese candlestick chart of HAL, below, I see some bearish divergences. Prices made new highs on a closing basis in January but the indicators have not confirmed those gains. Prices are trading above the rising 40-week moving average line.
The weekly OBV line has moved up into January but it did not make a new high to confirm the price high - a bearish divergence.
The MACD oscillator is narrowing and is poised to turn lower in what will become another bearish divergence versus the price action. Bearish divergences - and bullish divergences, too - are imprecise timing tools. They alert you to changes beneath the surface and then you need to be more alert for a price reversal.
In this daily Point and Figure chart of HAL, below, I can see a downside price target in the $37 area.
In this weekly Point and Figure chart of HAL, below, I see that the software is projecting an upside price target in the $63 area. A weekly trade at $44 is needed to refresh the uptrend.
Bottom line strategy: The charts and indicators of HAL are giving me enough evidence
to recommend reducing your long exposure.
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