Halliburton, the oil service company
released earnings this Sunday that beat wall street expectations in both revenue and EPS(earnings per share). HAL said third quarter earnings were .58c per share on 5.8B in revenue while wall street expected .54c on 5.52B. This represents EPS growth of 22% and revenue growth of a 19%. Now there has been alot of talk lately about a rotation into more conservative large cap stocks out of smaller caps and commodity related companies. Well this 30B market cap has a PE of about 12 on 20% growth, a 1% divdend and a 2B$ stock buyback program. In other words I expect there to be some major fund buying in HAL next week after it has been neglected for months. Lets take a look at the chart:
As you can see, there is some pretty serious resistance just above HAL's closing price last friday. I would expect HAL to gap above this resistance around 30 and run all week heading for that 200 dma before a pullback.
For comparison, here is how HAL behaved last year on a similar earnings beat with around .40c in EPS. As you can see the opening price would have been a great place to go long even after a sizeable gap.
The key is for HAL to gap close to or above and hold $30.30. I would consider the nov 30$ or 32.50$ calls, maybe the dec 35$'s depending on your time horizon.
Analyst Info
As you can see, there is some pretty serious resistance just above HAL's closing price last friday. I would expect HAL to gap above this resistance around 30 and run all week heading for that 200 dma before a pullback.
The key is for HAL to gap close to or above and hold $30.30. I would consider the nov 30$ or 32.50$ calls, maybe the dec 35$'s depending on your time horizon.
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