Option traders appear to be setting up for a bullish move on Patterson-UTI Energy Inc. (PTEN). Traders plowed into 3,378 new call option contracts -- 10.21 times the average volume -- on the stock on Tuesday. And we know that traders were eager to get into this trade because 94% of the trades came in on the ask price.

Patterson-UTI faces resistance just below $17. The stock closed Tuesday at $16.19, up 9.42% during the past month.

Option traders also look like they are preparing for a bearish move on iShares iBoxx $ Invest Grade Corp Bond (LQD). Traders bought 10,043.00 new put option contracts -- 7.92 times the average volume -- on the stock. A full 100% of these trades also came in on the ask price.

The stock closed Tuesday at $111.52, up 1.09% during the past month.

While other earnings may have disappointed last week, the news was good for oil giant ConocoPhilips (NYSE: COP). In what some took as a good sign for big oil, the Houston-based company reported that third quarter net income surged 41% year over year to $3.39 per share, and that revenue also surged 52% to $70 billion. We'll see whether the good news extends to other petroleum giants scheduled to report quarterly results this week.

Analysts surveyed by Thomson Financial are looking for BP (NYSE: BP) profits to have grown 43.2% in the most recent quarter to $2.34 per share on revenue of $109.7 billion, and Chevron Corp. (NYSE: CVX) to post earnings up 39.4% to $3.25 per share on revenue of $86.8 billion. Marathon Oil Corp. (NYSE: MRO), ExxonMobil Corp. (NYSE: XOM), and Royal Dutch Shell (NYSE: RDS.A) likewise are expected to report higher net income of $2.33 per share (sales of $23.4 billion), $2.40 per share (sales of $131.4 billion), and $2.65 per share, respectively. Even Valero Energy Corp. (NYSE: VLO) is expected to post earnings slightly higher to $1.46 per share (sales of $36.4 billion), despite the effects of Hurricane Ike. Among these companies, only BP and Valero beat earnings expectations in the previous quarter. Not surprisingly, analysts on average recommend buying all except Valero, and shares of all of these companies have recently hit 52-week lows.

MOST NOTEWORTHY: Suntech Power, First Solar, Banco Santander, Internap and NetGear were today's noteworthy initiations:

• Merriman initiated shares of Suntech Power (NYSE: STP) with a Buy rating and believes the company is benefiting from strong worldwide demand for solar PV technology. The firm suggests a potential 12-month stock price range of $56-$64.
  
• Merriman also started shares of First Solar (NASDAQ: FSLR) with a Sell rating, as they believe the company's market is limited to ground-based systems because of its cadmium-based technology, which they feel could lead to environment concerns over time.
  
• Deutsche Bank resumed coverage of Banco Santander (NYSE: STD) with a Buy rating. The firm is positive on the bank's agreement with ABN Amro (NYSE: ABN) and feels the company has a lack of exposure to risky assets.
  
• Jefferies believes Internap (NASDAQ: INAP) is well-positioned with its suite of services to address a rapidly growing market, starting shares off with a Buy rating and $20 target.
  
• Nollenberger believes NetGear (NASDAQ: NTGR) provides a pure-play opportunity to capitalize on the global penetration of broadband connectivity. The firm resumed coverage with a Buy rating and $36 target.

OTHER INITIATIONS:

• ThinkEquity initiated Google (NASDAQ: GOOG) with a Buy rating and $800 target and Yahoo! (NASDAQ: YHOO) with an Accumulate rating.
  
• Banc of America initiated U.S. land drillers, including Grey Wolf (AMEX: GW), Nabors Industries (NYSE: NBR) and Patterson-UTI Energy (NASDAQ: PTEN) with Neutral ratings and Parker Drilling (NYSE: PKD) with a Buy rating.

"Oil is moving back up, and energy stocks look strong as we head into the final months of 2007," says Mark Skousen, who sees opportunities in the energy sector for both growth investors and income investors.

In his The Turnaround Trader, he looks at Patterson-UTI Energy Inc. (NASDAQ: PTEN), an independent oil and natural gas operator that provides pumping services and remedial work on existing wells in North America. He says, "Patterson-UTI Energy has been in a two-year bear market.

"Two years ago, the stock topped out at $38 a share. This year, it reached a high of $28. In the most recent quarter, its revenues and earnings fell unexpectedly by 18%. But Patterson-UTI Energy is sporting a 25% profit margin and now is selling at only six times current earnings.

"The stock is deeply undervalued and easily could move back up to $28 a share or higher. Zacks Investment Research predicts the stock will reach $29 this year, 'well within historical trading range.' Let's buy Patterson-UTI Energy and set a protective stop of $18 a share. For those willing to take a gamble, consider buying the January $30 calls."