We’re selling 375 shares of Halliburton (HAL) at roughly $42.62 each. Following Thursday’s trade, Jim Cramer’s Charitable Trust will own 2,000 shares of HAL, decreasing its weighting in the portfolio to about 2.96% from about 3.5%. Shares of North American-focused oilfield services company Halliburton are rallying — up roughly 4% to their highest levels since June. It’s thanks in part to Wolfe Research double-upgrading HAL to an outperform rating from underperform (buy from sell) and increasing its price target on the stock to $51 per share from $37. The analysts’ recommendation is helping push HAL’s year-to-date gains to nearly 8% and extending what has been a staggering rally over the past few months. HAL 1Y mountain Halliburton (HAL) 1-year performance We’ve traded around our Halliburton position lately. In early December, we sold 300 shares at around $38 per share and then watched the stock quickly fall a few dollars to around $36 on Dec. 16. Due to our conviction in our Halliburton thesis, which is based on the need for more oil drilling globally, the strong pricing power it has in an extremely tight equipment market, and a reduced cost structure — we viewed this short drop opportunistically. We pounced on shares, bought back half of what we sold , and upgraded our rating back to a 1 . HAL has had a strong run since that buy, gaining roughly 18% compared to the S & P’s move of almost 3%. Even though our thesis still holds, and we expect free cash flow to materially improve in 2023 versus 2022, the conversion of a HAL bear into a bull in Wolfe when the stock has been such a strong outperformer makes us want to take advantage of this strength by taking a profit. This sale will lock in a gain of about 14% on stock purchased in March 2022. We also downgrade our rating back to a 2, meaning we will wait for a pullback before buying again. We also want to point out that this trim is consistent with our discipline of making some sales when the market becomes overbought, according to the S & P Oscillator . Following Wednesday’s rally, which pushed the S & P 500 ‘s gains above 3% since the new year started, the Oscillator increased to 6.46% from 4.62%. As a reminder, any value above a positive 4% signals the market is overbought and potentially due for a pullback. It’s a sign buyers may have exhausted themselves, and we might be seeing a little of that Thursday, with the tepid reaction to a very encouraging consumer price index release. The Oscillator, of course, could become more overbought from here and the rally could stretch on. But at a minimum, we think an overbought Oscillator serves as a reminder that the broader market has had a great run in a very short period and could be due for a pause. (Jim Cramer’s Charitable Trust is long HAL. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
A Halliburton oil well fielder works on a well head at a fracking rig site January 27, 2016 near Stillwater, Oklahoma.
J. Pat Carter | Getty Images
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