If you're tracking momentum in the energy sector, a couple of stocks are worth watching closely right now. As of December 12, 2025, Precision Drilling Corp (PDS) and Kodiak Gas Services Inc (KGS) are both flashing technical signals that suggest they might be due for a breather after recent rallies.
The warning comes from the Relative Strength Index, or RSI, a momentum indicator that measures how a stock performs on up days versus down days. Think of it as a temperature reading for market sentiment. When the RSI climbs above 70, it typically signals that a stock has gotten ahead of itself and might be overbought. That doesn't guarantee a decline, but it does suggest caution for traders who pay attention to technical patterns.
Precision Drilling Corp
Precision Drilling has been on quite a run, jumping roughly 20% over the past month. The rally followed better-than-expected quarterly sales results posted on October 22. CEO Carey Ford didn't hold back in his enthusiasm, noting that the third quarter "not only achieved financial results that exceeded most expectations, but also demonstrated our ability to meet shareholder capital allocation commitments while continuing to strengthen our competitive position through fleet investments in key operating markets."
Ford highlighted the company's positioning in U.S. natural gas markets along with Canadian heavy oil and unconventional natural gas markets. He pointed to the company's scale and technical expertise as key advantages that have allowed Precision to "capture numerous opportunities to deploy upgrade capital underpinned by customer commitments, drive revenue and activity growth, and deliver excellent financial returns to our shareholders."
The stock hit a 52-week high of $71.77 and currently carries an RSI value of 73.5, well into overbought territory. Shares slipped 0.9% on Thursday to close at $70.32. The momentum score sits at 79.18, while the value rating comes in at 88.02.
Kodiak Gas Services Inc
Kodiak Gas Services has also enjoyed a solid month, climbing about 11% following news on December 11 that EQT Infrastructure III and EQT Infrastructure IV funds have completely exited their investment in the company. The stock has been riding that momentum higher, reaching a 52-week high of $50.43.
The RSI for Kodiak sits at 70.8, just barely over the overbought threshold. Shares actually rose 1.3% on Thursday to close at $37.93, showing the stock still has buying interest despite the elevated technical reading.
For momentum traders, these RSI levels serve as yellow flags rather than red lights. Overbought conditions can persist longer than expected, especially when fundamental news remains positive. But history suggests that stocks in this territory often consolidate or pull back in the short term before resuming any upward trend. Whether these energy names cool off this month or continue defying gravity remains to be seen.
