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Forecasting Halliburton’s Stock Price

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Apr. 24 2018, Updated 6:50 p.m. ET

Halliburton’s implied volatility

Implied volatility signals a stock’s potential price movement. Between January 22 and April 23, when Halliburton (HAL) announced its 4Q17 and 1Q18 financial results, its implied volatility rose to 24.9% from 23%, and its stock price fell 8%. HAL comprises 3.2% of the SPDR S&P Oil & Gas Equipment & Services ETF (XES), which provides exposure to the oil and gas equipment and service segment of the energy sector. XES fell 11%. 

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Halliburton’s seven-day stock price forecast

Based on its implied volatility and considering a normal distribution of stock prices, a standard deviation of one, and probability of 68.2%, Halliburton stock will likely close between $53.85 and $50.25 in the next seven days. HAL’s stock price was $53. 58 on April 23.

Peers’ April 23 implied volatility and seven-day price forecasts

  • TechnipFMC’s (FTI) implied volatility was 34.6%, implying its stock price could be $35.11–$31.89.
  • McDermott International’s (MDR) implied volatility was 68.4%, implying its stock price could be $7.66–$6.34.
  • Weatherford International’s (WFT) implied volatility was ~80%, implying its stock price could be $2.88–$2.30.

Crude oil’s implied volatility

Like HAL’s volatility, crude oil’s implied volatility rose, to 25.7%, between January 22 and April 23. Next, we’ll discuss crude oil’s correlation with HAL.

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