RIG Is Ready to Rock; Transocean Stock Could Rise 25%
NEW YORK (TheStreet) -- Transocean (RIG) - Get Report looks like it is ready to rock on the charts. Last time we discussed RIG it was Sept. 16.
Here's what we said: "The decline last month to a new low for the move down could be considered a 'head.' Because these patterns often display symmetry in their development, it may take another seven months for the right side of this bottom to play out. Patience should pay off when RIG emerges from the base and starts a new up leg. Look for volume to be heavier than average when this occurs."
We expected a long, drawn out bottoming process, but RIG caught our attention this afternoon. In this chart, above, we can see how prices are rallying off the rising 50-day Moving Average. The On-Balance-Volume line is edging up, but more importantly, it looks like RIG is poised to break above its October highs to start a new advance. This leg up could carry RIG back to its May highs in the $21 area. Keep a sell stop below $14.50 for now.