Transocean Ltd. (NYSE:RIG) gained 0.11% in yesterday’s session, going up from its prior closing price of $9.21 to $9.22, and has now recorded rally in 5 consecutive sessions. Many in the market will be closely watching whether this winning streak is sustainable or take a temporary pause for the next couple of trading sessions. The stock price went upward in 7 of the last 10 days and has generated 13.83% during the last two weeks. Trading activity decreased by -1.37 million shares, and in total, 21.66 M shares exchanged hands for about $199.71 million. It should be noted that increasing price and decreasing volume show lack of interest and this is a warning that something has fundamentally changed.
Inside RIG’s Recent Trend
Transocean Ltd. (RIG) is the upper part of a very wide and horizontal trend and normally this would pose a good selling opportunity, but a break-up through the top trend line at $9.31 will give a strong buy signal and a trend shift may be expected. Given the current horizontal trend you can expect Transocean Ltd with 90% probability for the price to range between $7.42 and $9.44 in this timeframe. Investors sometime notices large volume spikes after a breaking of the horizontal base, and stocks rarely experience a roller coaster ride from the bottom of a trend. Stocks jumping at a middle end of a horizontal base are therefore followed in search of a potential runner.
Transocean Ltd. Technical Signals
RIG has witnessed its long term and short term MA triggering a buy signal. Many traders watch for short-term averages to cross above long-term averages to signal the beginning of a uptrend. Upon corrections, the price will meet support from the averages between $8.81 and $8.34. A break down through these support points will trigger sell signals. Its pivot point low generated buy signal on Friday September 08, 2017, which calls for additional surge until the stock forms a new pivot point high. There was a decrease in volume but the price rose. This is usually not interpreted as a good sign as traders widely believe falling volume should see declining stock. Investors should be watching the price action like a hawk in the coming sessions.
Transocean Ltd. (NYSE:RIG) Support And Resistance Levels
Transocean Ltd. (RIG) recorded volume accumulation so there will probably be a surplus of buyers at $8.77. In case of gains, the next resistance from accumulated volume will not be far away from today’s level at $9.25.
Accumulated volume is going to prevent the price from rising further at $9.25 and this action will lead the price to take a temporary pause or stay muted for a few days.
Transocean Ltd. (RIG) Risk Assessment
A volatility based measure Bollinger Bands suggests this stock poses high risk. In the most recent session, the stock price hovered around $0.42 between high and low, or 4.62%. The average volatility for the past week stood at 4.69%.
The stock is in overbought condition based on RSI(14) readings and sits at the top end of the trend. In general, this offers great exit point for the short term traders. The RSI above 70 combined with the trend position poses greater risk so increased volatility should be expected. The stock correction is due. The decline may accelerate to the downside in the near term but it is reasonable to consider what the key support levels may be that would support a bounce back to the upside for stock.