The last year has been tough for shares of contract oil and gas driller Ensco (ESV - Get Report). The $24 billion stock has slipped more than 13% in those trailing 12 months, a return that's particularly egregious given the fact that the S&P 500 has climbed 20% over that same stretch of time. But fortunes could finally be turning for owners of ESV this week.
Ensco is currently forming a double bottom pattern, a bullish reversal pattern that looks exactly like it sounds. The setup is formed by a pair of swing lows that bottom out at approximately the same price level. The buy signal comes on a push through the peak that separates them; for ESV, that price level came in at $52. More important, it got taken out last week.
Now, shares are "throwing back" to retest newfound support at that $52 price level. While the throwback looks a little ominous now, traders should treat it like a second low-risk chance at an entry in shares of ESV. Momentum has been making higher lows since February, a bullish divergence with price that points to buyers controlling the reigns in this name.
Wait for the bounce off of $52 -- then ESV is a buy again.