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Today, we’re opening a new bullish trade on Halliburton (HAL). HAL is scheduled to release its quarterly earnings on Wednesday, July 20, before the market open, and the market appears primed to send the stock higher.

HAL has been recovering nicely since mid-February as oil prices have started to rise. This price recovery has led to a resumption of exploration and drilling activity, which in turn has led to an increase in demand for HAL’s services. Even if oil simply remains stable, HAL’s broad industry presence and improving margins should help push the stock higher.

HAL completed an inverted “head-and-shoulders” continuation pattern on July 12 when the stock closed above the down-trending resistance level that formed the neckline of the pattern from June 8 through July 11. This is a positive sign and we believe a positive earnings announcement will be the perfect catalyst to send the stock higher.

Buy to open the HAL August 50 Calls (HAL160819C00050000).

You can learn more about identifying price patterns and using them to project how far you think a stock is going to move in our Advanced Technical Analysis Program.

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