Halliburton Company provides various products and services to the energy industry for exploring, developing, and producing oil and natural gas worldwide. It operates in two segments, Completion and Production, and Drilling and Evaluation. The Completion and Production segment offers production enhancement services, including stimulation services and sand control services. This segment also provides completion tools consisting of subsurface safety valves and flow control equipment, surface safety systems, packers and specialty completion equipment, intelligent completion systems, expandable liner hanger systems, sand control systems, well servicing tools, and reservoir performance services. The Drilling and Evaluation segment offers drill bits and services, including roller cone rock bits, fixed cutter bits, hole enlargement, and related down hole tools and services. This segment also provides drilling fluid systems, performance additives, completion fluids, solids control, specialized testing equipment, and waste management services. The company serves upstream oil and gas industries.
To analyze Halliburton’s stock for potential trading opportunities, please take a look at the 1-year chart of HAL (Halliburton Company) below with my added notations:
I latched on to HAL because of the one simple price level at $30. Not only can you see the $30 support (navy) from back in December and May, but the $30 resistance (red) has also been very obvious over the last (2) months. So, the $30 price is key to this stock. If you are bearish, you might short HAL at the $30 mark, but if you are bullish you would want to see the stock break through the $30 resistance.
The Tale of the Tape: HAL presents two simple trading opportunities based on its key level of $30. A short position could be placed on a rally back up to the $30 resistance, or a long play could be made on a break above $30 if that should happen.
Before making any trading decision, decide which side of the trade you believe gives you the highest probability of success. Do you prefer the short side of the market, long side, or do you want to be in the market at all? If you haven’t thought about it, review the overall indices themselves. For example, take a look at the S&P 500. Is it trending higher or lower? Has it recently broken through a key resistance or support level? Making these decisions ahead of time will help you decide which side of the trade you believe gives you the best opportunities.
No matter what your strategy or when you decide to enter, always remember to use protective stops and you’ll be around for the next trade. Capital preservation is always key!
Christian Tharp, CMT