If you watched "Mad Money" last Friday you learned that Jim Cramer's game plan for this week begins with earnings from Halliburton Co. (HAL) , which released its third-quarter numbers here on Monday morning. Earnings per share for the oil services giant were in line with expectations but Halliburton missed on revenue. HAL was trading flat in pre-market activity. Let's check out the charts and indicators before the opening bell.
In this daily bar chart of HAL, below, we can see that the share price of HAL has been weak the past 12 months. Prices are testing the declining 50-day moving average line but are well below the bearish 200-day line. The daily On-Balance-Volume (OBV) line has been holding its low since June, giving us a subtle suggestion that sellers are no longer as aggressive as they were in prior months. The 12-day price momentum study shows that downside momentum has slowed from May to August to now, which signals that forward-looking investors have been slowly going long into weakness. This setup can precede a bottom pattern or even a rally.
In this weekly bar chart of HAL, below, we can see that prices have suffered the past three years but the picture is mixed now. HAL is still below the declining 40-week moving average line but the weekly OBV line looks like it is trying to bottom while the 12-week price momentum study in the lower panel shows a large bullish divergence between momentum slowing even though prices are still in a downtrend. The pace of the decline is slower now at these lower and more attractive prices.
In this Point and Figure chart of HAL, below, we can see a small accumulation pattern and a modest upside price target.
Bottom line strategy: Patient investors could consider going long HAL if they can risk a close below $16.
