uploads/2017/09/IV-5.jpg

Here’s What We Can Forecast for Halliburton Next Week

By

Updated

Halliburton’s implied volatility

On September 5, 2017, Halliburton’s (HAL) implied volatility was 24.2%. Since HAL’s 2Q17 financial results were announced on July 24, 2017, its implied volatility has remained nearly unchanged at that level. Halliburton makes up 0.14% of the iShares Dow Jones US (IYY). IYY has remained unchanged since July 24, 2017, whereas HAL stock has fallen ~6.0% during the same period.

In January 2016, Halliburton’s implied volatility was one of the highest in the past three years at ~52.0%. Since then, its implied volatility has fallen sharply. Currently, it’s lower than its past three-year average of ~31.0%. Since early July 2017, Schlumberger’s (SLB) implied volatility has fallen from ~29.0% to ~24.0%. Crude oil’s volatility during the same period has also fallen.

Article continues below advertisement

Forecast for Halliburton

Based on Halliburton’s implied volatility and assuming a normal distribution of stock prices and one standard deviation probability of 68.2%, HAL stock will likely close between $41.16 and $38.50 in the next seven days. HAL stock was $39.83 on September 5, 2017.

Implied volatility for HAL’s peers

McDermott International’s (MDR) implied volatility on September 5, 2017, was ~43.0%, while Carbo Ceramics’ (CRR) implied volatility that day was ~71.0%. Flotek Industries’ (FTK) implied volatility on September 5 was ~61.0%.

What’s HAL’s correlation with the price of crude oil? Let’s find out in the next part of this series.

Advertisement

More From Market Realist