Markets

Charts Say Transocean (RIG) Digging a Deeper Hole for Itself

Transocean Ltd (NYSE: RIG ) got a name - a bad name - for itself due to its role in the Gulf oil spill. Andt a look at the charts show that Transocean stock is a name to continue to avoid in your portfolio now, or to short if you feel comfortable playing the downside.

This international provider of offshore contract drilling services has been in a broad "W" sideways movement since 2008. Following a major breakdown in April (Head & Shoulders), the stock plunged to its 200-day moving average at $70.

rig transocean

But with renewed selling pressure, it is likely that another breakdown could take this stock even lower. Insiders continue to sell and the stochastic (an overbought/oversold indicator) flashed a sell signal last week. Those who hold RIG should sell their shares and short sellers could take new positions with a target of $60.

As always, if selling short, protect your positions with stop-loss orders and check with your broker for any special circumstances regarding the short sale of this stock.

Read Today's Daily Market Outlook - Charts Show Market on the Brink of a Bearish Move.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.