RIG finds buyers at key support level
Transocean Ltd (RIG) Technical Analysis Report for Oct 12, 2018 | by Techniquant Editorial Team
RIG ended the week -3.44% lower at 13.19 after gaining $0.38 (2.97%) today, notably outperforming the S&P 500 (1.42%). Trading $0.19 higher after the open, Transocean was unable to hold its gains as the bears took control ending the day below its opening price. Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (RIG as at Oct 12, 2018):
Friday's trading range has been $0.50 (3.79%), that's slightly below the last trading month's daily average range of $0.52. Things look different on the weekly timeframe, where the market's trading range of the last week has been way above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for RIG.
Two candlestick patterns are matching today's price action, the Southern Doji which is known as bullish pattern and one neutral pattern, the Doji.
After trading down to 12.90 earlier during the day, the stock bounced off the key technical support level at 12.93 (S1). The failure to close below the support might increase that levels importance as support going forward. When prices bounced off a significant support level the last time on October 5th, RIG gained 2.27% on the following trading day. Prices are trading close to the key technical resistance level at 13.48 (R1). After having been unable to move above 13.34 in the previous session, the share ran into sellers again around the same price level today, missing to move higher than 13.40.
The market shows weakness in the short-term (in accordance with its long-term downtrend) with only the medium-term trend still being bullish.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Doji" stand out. Though it is usually interpreted as neutral, it has actually shown to be bearish for Transocean. Out of 128 times, RIG closed lower 51.56% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the short side has been after 10 trading days, showing a win rate of 57.81% with an average market move of -0.63%.