Buck, here is my TA on PTEN based on Elliott Wave theory.
The horizontal trading channel of PTEN is a "flat" correction wave in EW theory. Notice that there was an ABC correction wave starting about Oct 10 and running until Nov 10. But, the C wave did not go lower than the A wave. Next it had a three week X wave up (pink line on my chart) followed by another flat ABC. The wave up that started the first week in January is the question at this point. I have charted it as wave 1 of on impulse wave up. The last two days represent the start of wave 2, which is an ABC correction that should correct 35-50% of wave 1.
stockcharts.com
However, wave 1 is not real nicely defined, so I see two other scenarios that could unfold. Time will tell!
This current correction could be sub-wave 4 of wave 1 and we could see PTEN turn up right away and go back up in sub-wave 5 of wave 1.
The second alternate scenario is that what I see as wave 1 could be another X wave and we could have another flat ABC with a slightly higher channel.
OK, how do we know which scenario is the correct one. Well, if it goes back up without at least a 38.2% correction, then I would go with the first alternative, that wave 1 has not completed itself and PTEN is going to have a really big run up over the coming months.
On the other hand, if the correction is significantly more than 62.8%, then I expect that the third scenario is correct and we can expect another trading range to develop.
It is my observation that no TA is the end all. EW theory is very helpful to me, but it is not 100% foolproof. I also look at DABUM's averages and support-resistance lines and of course the momentum indicators, MACD, RSI and Stochastics. I am starting to pay more attention to Bum's money flows. And I listen very closely to Jim_P, Kollman, and other fundamentalists to try to outwit Mr. Market. Thanks to all of you I have doubled my net worth since I retired. (And believe me, the Social Security checks are not much help. VBG)
A lot of our energy stocks are exhibiting similar patterns to PTEN, so I hope this long winded post will be generally helpful.
Best to all,
JRH |
