RIG (Transocean) – Potential Reversal?
Technical Overview
• Current Trend: RIG has been in a clear downtrend since September 2023, as confirmed by Dr. Elder’s Triple Screen framework. However, recent technical signals suggest the trend is losing steam.
• Weekly Timeframe:
- The MACD histogram is showing a bullish divergence, indicating that the momentum behind the price decline is weakening.
- Additionally, a falling wedge pattern has emerged on both the weekly and monthly charts—typically a reversal signal with strong bullish implications.
- Entry Strategy and Price Action Expectations
• Daily Timeframe:
- We are closely monitoring the $3.90 level. If the price holds above this level, it is likely to form a double bottom on the daily chart. A breakout above the wedge could trigger significant upside momentum.
- Historically, similar corrections after bullish divergences on the weekly chart have produced gains of up to 90%.
Market Context and Macro Factors
- Oil Market Influence: The price action in RIG correlates heavily with the broader oil market. With oil supply tightening due to OPEC+ cuts and geopolitical tensions (e.g., the Middle East conflict), the oil market could experience an upward cycle. These macro tailwinds may accelerate RIG’s recovery if confirmed by technical breakouts.
Conclusion
- If the $3.90 support level holds, and the double bottom forms as expected, RIG has the potential to align with the broader bullish trend on the weekly chart. With a falling wedge pattern and bullish divergence supporting the reversal narrative, this could mark the beginning of a new uptrend.
Potential Trade Setup:
- Entry: Above $4.00 for confirmation of the breakout.
- Target: 90%+ upside potential based on historical patterns.
- Stop Loss: Below $3.80 to minimize risk. This setup offers a high-probability trade, provided the technical signals align with favorable market conditions. Monitor daily for confirmation and adjust your risk accordingly.
RIG https://www.tradingview.com/x/7XwJrZuP/https://www.tradingview.com/x/qKGWmSEc/https://www.tradingview.com/x/cRs5ChKH/Disclaimer: This analysis reflects my personal opinion and is provided for informational purposes only. It is not intended as financial advice or an investment recommendation.
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