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.
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.