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Fan Yang

Precision Drilling Corporation (PDS) Failed to Confirm Price Bottom; Now What?

In February, I said that I loved the daily price chart for Precision Drilling Corporation $PDS. Price was in a bullish breakout and pulled back to around the resistance of the broken consolidation. Briefly PDS bounced from the key support/resistance area, suggesting the market is respecting the price bottom and is ready for a bullish swing.

PDS Daily Chart

(click to enlarge)

Failed to Confirm:
- The fact that price eventually broke below the support/resistance area suggests a failed bullish attempt, which could in turn be interpreted as bearish.
- Price broke below the moving average cluster, which also suggests weakness of bulls.
- Finally, the RSI broke below 40, which shows lost of bullish momentum.
- Despite all that, $2.80 might still be a last line of defense for the bullish scenario.
- For one, oil prices have rebounded in March after a dip in February, so PDS might follow suit. 
- Another reason is that price is still in the middle of the previous consolidation range and holding above a rising trendline support.
- Holding above $2.80 with a subsequent break above $3.40 should be a strong clue for the bullish outlook towards $4.00 up to $4.40, and $4.60.