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Today we've chosen to take a look at the point & figure chart of Patterson-UTI Energy Inc. (Nasdaq:PTEN). This type of chart is rarely used by beginner traders, but as you can see from the chart below, the lack of random price fluctuation can make it very easy to identify major levels of support and resistance. Point & figure charts are constructed by a number of columns that consist of a series of either stacked Xs or Os. A column of Xs is used to illustrate a rising price, while Os represent a falling price. The direction of the chart only changes once a predefined reversal amount has been reached. Notice how a bearish descending triangle pattern has formed on the chart. This chart pattern shows that the $20 level is a major level of support and that the stock will likely experience a sharp pullback if the price moves below it.

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