Shares of Halliburton began a steep decline in late May. After a damaging breakdown on the 25th the stock had left behind layers of supply and was entering a fresh down leg. One week ago HAL blew through major support near its 200 day moving average. This key long term indicator had previously held the February, March and April lows. The sell off continued this week pushing shares back down to the 2018 lows. Today HAL, along with the bulk of the energy sector, managed a strong bounce but will it carry with it enough momentum to move back above the 200 day moving average? Option traders are positioning themselves that way. Here’s some detail from our option expert Bob von Halle:
There has been significant buy side interest in HAL Aug 50 calls all week long….perhaps in anticipation of a large move higher in oil prices post the OPEC meeting today. On Tuesday, over 20,000 contracts traded, on Wednesday over 8,000 traded, on Thursday over 7,000 traded and today 4,000 crossed the tape. The open interest in total in that strike is now over 38,000 contracts and is by far the largest in the name.