RIG Transocean Weekly and Daily Charts

Keystone entered RIG long at the bottom over the last two days. Interestingly, there is lots of activity and interest in the oil plays today in media as WTIC crude oil plunged to 88.13 and then rebounded above 91 in a matter of a few hours. Many oil and gas stocks continue to be slapped silly but RIG and DO feel some love today. Note the volume candlestick on the daily chart as long traders are starting to buy the bottom. After the bell this evening HP is trading up so traders are nibbling on oil plays after the dramatic reversal in oil today.

It is important to study both the daily and weekly charts since it will determine your path forward depending on your time frame and risk tolerance. As Keystone points out all the time, any ticker or index that sets up with positive divergence across all indicators on both the daily and weekly charts is about a 95% plus successful long trade. However, what do you notice for the RIG charts. Yes, the daily chart is set up perfectly with positive divergence across all indicators (green lines) but the weekly chart shows weak and bleak indicators (red lines) except for the stochastics that are oversold and positively diverged wanting to see a bounce which gels with the daily chart set up. So what does all this mumbo jumbo mean?

The near-term possie d bounce should continue for a few days but you must be nimble if long because the weekly chart will want price to come back down again to the lows. When that happens, positive divergence will likely form on the weekly chart (thin green lines in the right margin) ushering in a stronger base for RIG going forward. So if in RIG on the long side you must be nimble and not too greedy since price will likely roll over for another trip lower to please the weekly chart.

The 32.50-33.50 area is and upside target. Price has violated the lower standard deviation bands on both charts so a move back to the middle bands are in play. On the daily this is 34.52 and dropping. So an upside target for the near term may be refined to that 33-34 area. The middle band on the weekly is 39.52 and dropping so the idea would be that the 36-39 area would be on tap say as the year comes to an end. So if you are a low-risk long-term trader you can begin nibbling and building a long position moving forward. If a short term or day trader, the stock can be played now from the long side but you must stay agile.

So the projection is up for RIG over the coming days but then price should roll back over to the downside to print at the lows and develop a firm base moving forward. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.