Oil services giant Halliburton (HAL) needs no introduction, especially with a market cap of $25 billion and more than 50,000 employees worldwide.
The company hasn’t missed an earnings estimate in more than three years, and with the current estimate about a third of last year’s figure, that string will likely continue when the company reports on Oct. 16.
The stock typically does well following earnings. The shares have gained an average of about 9% in the two weeks following the past three quarterly reports.
On the charts, HAL is on a little run, gaining more than 8% so far this week. The surge has pulled the shares above their 20-day moving average, a trendline that has guided the stock along a 50% rally since July.
The next stop is potential resistance around $28-$28.50, an area that defined a top last month.
Sentiment toward HAL is mixed, although we’re seeing pessimism among options players. Keep in mind that pessimistic sentiment reflects lower expectations that often lead to upside earnings surprises. (Conversely, optimism represents higher expectations and, thus, can create some vulnerability if those expectations aren’t met.)
Halliburton’s put/call ratio looks to be putting in a peak at its highest point of this year, a sign that skepticism may be on the verge of unwinding into buying pressure. Such buying could be what the stock needs to bust through the September highs.
Halliburton doesn’t report until Friday Oct. 16, which also happens to be expiration day for October options.
Keep an eye on it to see if the stock can continue its recent momentum and warrant buying call options, or if previous resistance will kick in once again. Either way, don’t let HAL slip off your radar.
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