A Bottom In ProPetro Should Be Close

Summary

• Shares have been left for dead over the past months.
• We are finally seeing divergences on the daily chart.
• A bottom may be close.

Reversal patterns in technical analysis are usually the most difficult patterns to spot early. The reason being is that once a trend is in motion, the odds usually favor the continuation of the trend. This is why cheap stocks can get much cheaper before they finally bottom. The best strategy in these situations is to wait for the trend to change through either a weekly or even better a monthly swing low.

We are presently eyeing up ProPetro Holding Corp. (NYSE:PUMP) ( Oil & Gas equipment supplier) for a potential long swing play. The stock though has been caught in a nasty downturn since April of this year. Shares finally bottomed in early September and are now retesting that low over the past few trading days. The question now is whether we have a double bottom reversal pattern in play or are there lower lows on the cards.

When we have these setups where the stock has been literally left for dead, we like to go through the financials and valuation to see how they have been trending. Any insight that we can get from these trends is critical at these junctures. Why? Because spotting and then trading a pattern early can make an enormous difference to the return one can make on the respective trade.

For example, at present, even if ProPetro were to finally bottom in the not too distant future, we could easily get a head and shoulders pattern which would mean lower lows in the near term (head). Therefore, let's see how the firm's financials are trending at this present moment in time.

Growth in both the top and bottom line has been really impressive since 2015. Over a twelve-month trailing average, top-line sales have climbed to $1.93 billion and net profit has reached $204 million. ProPetro has a very strong

Analyst’s Disclosure:I/we have no positions in any stocks mentioned, but may initiate a long position in PUMP over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.