History Says Sell This Oil Stock Before Thanksgiving

HAL has struggled during the holiday week, historically

Managing Editor
Nov 15, 2018 at 2:17 PM
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Shares of Halliburton Company (NYSE:HAL) earlier touched a two-year low of $31.75, but were last seen up 0.3% at $32.34 in afternoon trading. The oil stock is attempting to recover alongside crude prices, which only yesterday snapped a record losing streak. Below, we will look into why history says now may be a good time to drop Halliburton stock.

On the charts, HAL stock has been in a long-term downtrend, dropping more than 41% since its mid-May highs. The equity's near-term outlook does not look good either, as HAL landed a spot on Schaeffer's Senior Quantitative Analyst Rocky White's list of the 25 worst stocks to own Thanksgiving week.

Daily Chart of HAL Since November

Per White, the security has been one of the worst performing S&P 500 Index (SPX) stocks during the week of Thanksgiving for the past 10 years. Specifically, the equity has averaged a loss of 1.5% during the holiday week, with a 60% negative return rate.

Despite HAL's fundamental and technical woes, analyst attention has been surprisingly optimistic toward the refinery stock. Seventeen of 20 analysts maintain "strong buy" ratings, and the stock's average 12-month price target of $49.21 represents a premium of 52% to current levels. A round of overdue downgrades or price-target cuts could send the shares even lower.

Lastly, Halliburton stock has been a strong target for premium buyers over the past year, based on its Schaeffer's Volatility Scorecard (SVS) of 95 out of 100. In other words, HAL has shown a tendency to make bigger-than-expected moves during the past 12 months, relative to what its options have priced in.

 

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