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Precision Drilling Corp.'s Channel Breakout06/10/03 09:49:19 AM
by Kevin Hopson
Precision Drilling Corp. recently broke out of a five-month trading range, indicating higher prices ahead. With short-term support levels now coming into play, I would look to accumulate these shares.
|Precision Drilling Corp. (PDS) is an integrated oilfield drilling and energy service company with operations worldwide. Like a number of other companies in this sector, Precision had been stuck in a trading range up until recently. More specifically, the stock consolidated in the $31.25 to $37.50 range for five months before breaking out late last month.|
|As a result, higher prices can be expected in the long-term, with the recent channel breakout indicating an ultimate target of between $50.00 and $56.00. This represents a potential gain of 28 to 44 percent from current levels. The first place I would look to buy is the stock's 20-day moving average ($38.09). The reason being that Precision's 10-day moving average ($38.70), as well as the median line of the green pitchfork, have recently been breached.|
|Graphic provided by: Stockcharts.com.|
|Being the case, the 20-day moving average will likely act as a good bouncing point in the near-term. However, should this short-term support level be taken out, my ultimate downside target would be the $37.50 level, site of Precision's recent channel breakout. With solid support in the $37.50 to $38.00 range and significant upside potential in the long-term, I would look to accumulate shares of Precision Drilling on near-term weakness.|
Kevin has been a technical analyst for roughly 10 years now. Previously, Kevin owned his own business and acted as a registered investment advisor, specializing in energy. He was also a freelance oil analyst for Orient Trading Co., a commodity futures trading firm in Japan. Kevin is currently a freelance writer.
|Glen Allen, VA|
|E-mail address: ||firstname.lastname@example.org |
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