Nabors Industries Ltd., together with its subsidiaries, provides drilling and rig services, and completion and production services. The company offers equipment manufacturing, rig instrumentation, optimization software, and directional drilling services. It also provides completion, life-of-well maintenance, and plugging and abandonment of a well. In addition, the company markets approximately 466 land drilling rigs for oil and gas land-based drilling operations in the United States, Canada, and approximately 20 other countries worldwide; approximately 445 rigs for land well-servicing and workover services in the United States; 98 rigs for land well-servicing and workover services in Canada; 42 rigs for offshore drilling operations in the United States and internationally; and 7 jackup units and components of trucks and fluid hauling vehicles.
Take a look at the 1-year chart of Nabors (NYSE: NBR) below with my added notations:
Starting in July, NBR declined steadily into December, and from there the stock started a 4-month, sideways move. During that sideways move, NBR has created an obvious resistance at $14 (blue). A break above that $14 level should mean higher prices for the stock.
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The Tale of the Tape: NBR has a key level of resistance at $14. A long trade could be entered on a break through that level. However, if you are bearish on the stock, a short trade could be made on any rallies up to $14.
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!
Christian Tharp, CMT
Follow me on Twitter: @cmtstockcoach