If you weren’t looking, you may have missed the energy stocks’ rally, with Halliburton (HAL) and SLB (SLB), formerly named Schlumberger, leading the way. Both oil field services energy stocks hold spots in the IBD Big Cap 20 and are near buy points.
The price of West Texas intermediate (WTI) crude oil has soared from below $70 per barrel in June to nearly $90 per barrel, the highest level this year. Energy stocks got a boost after Saudi Arabia and Russia announced on Sept. 5 they would extend oil production cuts until the end of the year, causing a supply deficit.
Halliburton and SLB — two of the largest oil field services providers — are tied for the No. 1 spot out of 30 stocks in the oil & gas field services group. The group rose to No. 3 out of the 197 IBD industry groups from No. 18 four weeks ago.
Energy Stock In A Buy Zone
Halliburton helps drillers find petroleum, manage geological data and provides other drilling services.
The stock is nearing the 52-week high from Jan. 18. Shares are in the 5% buy zone of a 41.08 entry of a cup-with-handle base.
Halliburton reported better-than-expected second-quarter earnings but missed sales estimates. The oil stock dropped for two days in heavy volume following the July 19 report, then started its recovery. The stock had one more pullback, which became its handle, before taking off in September.
The stock is about 7% above its 10-week moving average and has held above that level since late June.
Quarterly earnings slowed to 57% after three consecutive quarters of more than 100% EPS growth. Sales growth slipped to 14% after four quarters of over-30% growth.
Analysts expect full-year EPS growth of 40% this year and 13% in 2024, according to FactSet.
SLB Hits A 52-Week High
Energy stock SLB hit a 52-week high on Tuesday in heavier-than-average volume. The oil field services provider is extended from a cup-with-handle base with a 57.91 buy point.
After the breakout, the stock found support at its 10-week line in late August. But the touch of the line came below the base’s buy point, which would have made for an aggressive entry. The relative strength line has trended upward since late June.
SLB also reported second-quarter profit above estimates but missed on revenue projections on July 21. The company reported slowing quarterly EPS growth of 44%, down from 73% and 85% in the prior two quarters. Sales growth slid to 20% from 27% and 30% in the same time period.
Analysts forecast full-year earnings to grow 37% and 23% next year, according to FactSet.
Follow Kimberley Koenig for more stock market news on X, the platform formerly known as Twitter, @IBD_KKoenig.
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