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JimVanMeerten (62.80)

Transocean deserves a second look

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September 12, 2011 – Comments (0) | RELATED TICKERS: RIG

Complete Article and Graphs


I'm going out on a limb and predicting that investors who invest in Tansocean (RIG) at this level could see a short term pop of 23% - 27% annual total return over the next 5 years.  The stock has been beaten down but they now have almost all their deep water rigs back on line and the last one should be operational shortly.

A look at the weekly price over the past 2 1/2 years vs. the 10, 50 and 50 week moving averages on this chart provided by Barchartshows how beaten down it is.

Barchart technical indicators:

1 - 40% Barchart short term technical buy signal that is getting stronger

2 - Trend Spotter sell signal that is weakening

3 - The stock has begin trading above its 20 day moving average

4 - New lows and down 11.89% this month

5 - Although the stock is trading below its 50 and 100 day moving average

6 - Barchart computes a technical support level at 53.72

7 - Relative Strength Index is 46.89% and getting stronger

8 - Recently traded at 54.59 which is below its 50 day moving average of 58.81

Summary:  Transocean (RIG) has been beaten down not only from bad press but from having a major portion of their revenue producing rigs brought off line for inspection and updating.  These will all be back on line by the beginning of the year and in full production by mid next year.  As the investing community realizes that legal concerns from the BP spill are being abated and the new increased earnings and revenue figures hit the press you should see a lot of investors come back and get on board.  This is one where those who get on board early will reap the benefits not only in the short run but the long run as well.  Buy in at today's prices and you can expect a 23% - 27% annual rate of return within the next 5 years

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