Immediately following news of Donald Trump’s U.S. Presidential election victory, oil stocks surged. Halliburton (HAL) stock was last seen up more than 6.7% today, pacing for its best daily performance since October 2023. HAL is still underperforming for the year though, down 4% since January. And more losses could be on the way, as the stock is now flashing a historically bearish signal.
The oil name has risen to its 50-day moving average, and per Schaeffer’s Senior Quantitative Analyst Rocky White, it’s run into this trendline five times in the last three years. For the purpose of this study, White defines that as the equity trading above the moving average 80% of the time over the past two months and closing north of the trendline in eight of the last 10 sessions before coming within striking distance of it.
In those five instances, the equity averaged a one-month return of -8.2%, finishing lower 100% of the time. Should HAL suffer a shift of this magnitude from its current perch of $30.44, the shares would be back below $28, at the site of the stock’s October bottom.
Call traders have been running rampant on the security. This is per HAL’s 10-day call/put volume ratio of 10.88 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which sits in the 98th percentile of readings from the past 12 months. What’s more, Haliburton stock’s Schaeffer’s put/call open interest ratio (SOIR) of 0.90 ranks lowest possible percentile of readings from the past year. In other words, should this bullish sentiment begin to unwind, it could add headwinds for the energy name.