Atwal, who carded a 67 and 70 in the first two rounds is, now 11-under and lying tied third with one more round to go. Anirban Lahiri at tied 25th and Daniel Chopra at tied 30th are also playing in the same qualifiers.
An American of Indian origin, 22-year-old Bhavik Patel, a 2011 winner of California State Amateur title, was also in running to make the final stage.
Patel shot rounds of 69, 67 and 68 and was lying second behind Korea's Si Kim (70-61-67) at Bear Creek Golf Club in Murrieta, California, one of the six venues hosting the qualifiers, each of which will send about 18 to 20 qualifiers to the final stage.
But for the two late bogeys on the 15th and 17th holes, Atwal would have shared the lead with 11-time European Tour winner Robert Karlsson (68-67-68) at 13-under.
Atwal birdied five of his first seven holes before dropping his first bogey on 11th, but he quickly birdied the 12th and 13th to move to six-under for the day. However, bogeys on 15th and 17th pushed him down to third. MORE