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Bullish on Halliburton

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The last couple of trading sessions PremierMarkets.com has had its eye on shares of Halliburton, but we wanted to see the stock trade $44 and have demand firmly in control before the stock earned its way to our profiled portfolio. Today's trading at $44 had us adding HAL to an elite group of companies that we will now follow as bullish until the stock tells us different. We thought bullish longer-term option players would do well with a full position in the October $40 calls (HALJH) when offered at $7.60 earlier this morning.

Halliburton Holding (HAL) - $1 box

Today's trade at $44 had us on the alert for an upside move in shares of HAL and we're not just going to sit and watch this thing move higher. The stock has earned our respect with a second double-top buy signal and the bullish price objective of $64 has us thinking that a longer-term options trader could do well with this stock and the October $40 calls. Currently we like the stock/options long with a stop at $38.50 and bullish price objective of $60. I like to sell a little early, thus the $60 objective and not $64.

Oil Service Index Chart - $2 box

Anytime a trade is put on in a stock, the trader/investor should review the group itself. Currently, the supply/demand chart of the Oil Service Index (OSX.X) has demand in control and gives us indication that this index could trade the $166 level in coming months. After a nice pullback in March (red 3 to red 4) the OSX.X looks to have firmed up and looks ready to resume longer- term upward trend. A trade at 128 would have this index giving a second double top buy signal. First sign of trouble here would be a trade at 118. My thoughts would be as follows. If the OSX.X is going to trade 166 in the future, then component HAL might just meet its bullish price objective of $64. Here we currently have to charts that indicate bullishness. I'm not one to fight a trend, but you'll often times find PremierMarkets.com trading them.

Jeff Bailey
Senior Market Technician

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