McDermott International, Inc. (MDR) shares rose more than 10% during Wednesday's session after Saudi Aramco awarded it a $1.5 billion contract for engineering, procurement, construction, and installation services for offshore gas facilities and pipelines. The engineering phase will commence during the third quarter, with completion by year-end 2020.

The $1.5 billion contract follows a separate $3 billion-plus project awarded by Saudi Aramco for its Gas-Oil Separation Plant (GOSP) in consortium with China Offshore Oil Engineering Company. McDermott will lead the consortium that aims to build the GOSP offshore in the eastern flank of the Arabian Gulf, increasing production from 500,000 to 800,000 barrels of oil per day.

Earlier this year, the company announced better-than-expected first quarter revenue that tripled to $2.21 billion, but earnings missed analyst consensus forecasts. The company's backlog increased 41% year over year to $15.4 billion, but full-year revenue guidance was in line analyst estimates at about $10 billion for the year.

Chart showing the share price performance of McDermott International, Inc. (MDR)
TrendSpider

From a technical standpoint, the stock broke out from trendline resistance early during the session before giving up some ground later in the session. The relative strength index (RSI) reached overbought levels with a reading of 73.92, but the moving average convergence divergence (MACD) remains in a bullish uptrend. These indicators suggest that the stock could see some near-term consolidation before moving higher.

Traders should watch for some consolidation above trendline support at around $10.00 over the coming sessions. If the stock rebounds higher from these levels, traders could see a move to retest trendline resistance at $10.50. If the stock breaks down lower, traders could see a move down to the 50-day moving average at $7.73, but that seems less likely to occur.

The author holds no position in the stock(s) mentioned except through passively managed index funds.