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A Hot Stock to Play the Offshore Drilling Boom

Offshore

As you may know, I am someone who rarely uses a chart pattern or signal as the basis for a trade. I tend to do “top down” analysis, meaning that I start with the big picture, the economic and fundamental conditions, then drill down to individual companies that those conditions suit. Once I have settled on how to trade my view, I do look at the chart, but it is more about looking for basic support and resistance levels off which to set entry and exit points than anything. Sometimes, though, I do things kind of backwards, starting with a striking chart pattern, then confirming the trade by analyzing the fundamental conditions.

That is what has happened this week when it comes to Transocean (RIG), where both the chart and the fundamentals support buying the stock.

Let’s start where I did, with the technical picture. There are two ways of looking at the above 1-Year chart for RIG. The glass half empty look is that in the middle of this year, it tried to break higher but failed, forming as it did a very bearish “batman ears” kind of head and shoulders-ish pattern. The glass half full look, however, is the exact opposite, that it is now in the process of bouncing off of a strong support that has held multiple times in the past. On balance, I prefer the optimistic view here, because the support has proven so reliable all year. RIG has tested it on nine separate occasions in 2023 and it has always held. That is quite remarkable, and notable because RIG, like all…





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EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
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