Use a Pullback to Pounce on Patterson-UTI Energy

by Sam Collins | December 24, 2012 7:11 am

Patterson-UTI Energy (NASDAQ:PTEN[1]) — This drilling services company is one of First Call Network’s most recommended companies. It is estimated to earn slightly less this year than last; however, after upgrading its rigs and modernizing, its long-term contracts have a backlog sufficient to positively impact future earnings.

Technically, PTEN is trading in a bull channel with a bottom in June at under $14. In November, the 50-day moving average crossed above the 200-day moving average — a long-term buy signal called a golden cross.

The stock has been under heavy accumulation and flashed a MACD buy signal in November, so it was placed on our list of Top Stocks to Buy for December[2]. However, it hit the top of its channel and could pull back to the support line at under $17, which is our new buy under price. Buy PTEN as a long-term investment in the energy industry.

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