RIG stuck within tight trading range
Transocean Ltd (RIG) Technical Analysis Report for Jun 30, 2020 | by Techniquant Editorial Team
RIG ended the month 37.59% higher at 1.83 after gaining $0.05 (2.81%) today, notably outperforming the S&P 500 (1.54%). Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (RIG as at Jun 30, 2020):
Tuesday's trading range has been $0.11 (6.15%), that's below the last trading month's daily average range of $0.32. Weekly volatility is also lower, being way below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for RIG. Prices continued to consolidate within a tight trading range between 1.72 and 1.95 where it has been caught now for the last three trading days.
Prices are trading close to the key technical support level at 1.70 (S1). After having been unable to move above 1.86 in the previous session, the share ran into sellers again around the same price level today, missing to move higher than 1.87. The last time this happened on June 25th, RIG lost -7.77% on the following trading day.
The stock shows weakness in the short-term (in accordance with its long-term downtrend) with only the medium-term trend still being bullish.
Buying could accelerate should prices move above the close-by swing high at 2.05 where further buy stops might get triggered. Selling could speed up should prices move below the nearby swing low at 1.72 where further sell stops might get activated.
Among the three market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "High close to prior High" stand out. Its common bearish interpretation has been confirmed for Transocean Ltd. Out of 485 times, RIG closed lower 52.78% 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 56.08% with an average market move of -0.83%.