Patterson-UTI Energy Inc. is among the leading US providers of services in the sector of onshore oil drilling. The company owns over 275 drilling rigs for extracting natural gas and oil in Texas, New Mexico, Oklahoma, Louisiana, Mississippi, Utah and in the west of Canada. In addition, Patterson-UTI offers contract drilling, drilling services, consumables and pressure pump services. The company’s clients include most of the leading independent oil and natural gas companies.
In the following analysis, we will expand on the company’s stock from a chart-related point of view.
Review (daily chart)
The Patterson-UTI stock has been in an intact downward trend since April of this year, a trend which really picked up the pace in particular towards the end of July. Since the last strong downward movement, the stock of the company has now recovered well and corrected almost one hundred percent. Currently, we can already see the first signs that it could go in the direction of the main trend once more, making the stock a potential candidate for the short direction.
Outlook (hourly chart)
In the hourly chart, the currently running correction can be seen, which is still being shown in a sideways phase and has yet to develop in our preferred trading direction. For a short entry, we should wait for the formation of a signal, e.g. in the form of a P2, and place the stop loss above the last P3 (depicted in green).
Alternatively, and with the advantage of a cheaper stop, one can also practice trading from out of the correction or the formation of a reversal candle at a significant point.
The targets are located in the areas around approx. $15.00, which makes the stock even more attractive for short entries due to the potential down to the first target. If the price considerably exceeds the last significant high at approx. $21.00, we should abandon the short scenario for the time being (daily chart, depicted in red).
Before trading, one should take news in the environment and from the company into account. Similarly, one should also observe the development of the overall market.
Disclosure of possible conflicts of interest: at the time of publishing this analysis, the author is not invested in the securities or underlyings discussed.
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