Patterson-UTI Energy, Inc. (NASDAQ: PTEN)

Patterson-UTI Energy, Inc. provides onshore contract drilling services to major and independent oil and natural gas operators in the United States and Canada. The company operates through three segments: Contract Drilling, Pressure Pumping, and Oil and Natural Gas. The Contract Drilling segment markets its contract drilling services primarily in Texas, New Mexico, Louisiana, Oklahoma, Colorado, Utah, Wyoming, Montana, North Dakota, Alaska, Pennsylvania, Ohio, West Virginia, and western and northern Canada. The Pressure Pumping segment offers pressure pumping services that consist of well stimulation and cementing for the completion of new wells and remedial work on existing wells, as well as hydraulic and nitrogen fracturing, cementing, and acid pumping services in Texas and the Appalachian region. The Oil and Natural Gas segment owns and invests in oil and natural gas assets as a non-operating working interest owner located principally in Texas and New Mexico.

Please take a look at the 1-year chart of PTEN (Patterson-UTI Energy, Inc) below with my added notations:

1-year chart of PTEN (Patterson-UTI Energy, Inc)

PTEN has rallied nicely all the year. Along the way, the stock has found support and resistance areas primarily at the levels of $26, $28, $30, $32 (red) and $34 (blue). Each of those prices has been either support or resistance, or even both, multiple times. The stock is now trading just under the 52-week high resistance level of $34.

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The Tale of the Tape: PTEN is currently trading between $32 and $34. A long trade could be made on a pullback to $32, or even better, on a break above $34. A short trade could be made on a break below $32.

Before making any trading decision, decide which side of the trade you believe gives you the highest probability of success. Do you prefer the short side of the market, long side, or do you want to be in the market at all? If you haven’t thought about it, review the overall indices themselves. For example, take a look at the S&P 500. Is it trending higher or lower? Has it recently broken through a key resistance or support level? Making these decisions ahead of time will help you decide which side of the trade you believe gives you the best opportunities.

No matter what your strategy or when you decide to enter, always remember to use protective stops and you’ll be around for the next trade. Capital preservation is always key!

Good luck!

Christian Tharp, CMT

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