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RIG - a bearish stock that might find support

The stock of Transocean Limited (NYSE:RIG) registered a decrease of 9.24% in short interest. RIG’s total short interest was 92.82 million shares in May as published by FINRA. Its down 9.24% from 102.26 million shares, reported previously. With 20.11 million shares average volume, it will take short sellers 5 days to cover their RIG’s short positions. The short interest to Transocean Limited’s float is 27.1%. The stock increased 2.43% or $0.22 during the last trading session, hitting $9.48. About 13.05 million shares traded hands. Transocean LTD (NYSE:RIG) has declined 44.17% since October 9, 2015 and is downtrending. It has underperformed by 45.82% the S&P500.

Transocean Ltd. is an international well-known provider of offshore contract drilling services for gas and oil wells. The company has a market cap of $3.31 billion. The Company’s primary business is to contract its drilling rigs, related equipment and work crews primarily on a day rate basis to drill gas and oil wells. It has a 2.27 P/E ratio. The Firm operates through the contract drilling services segment.

The institutional sentiment decreased to 0.74 in 2015 Q4. Its down 0.17, from 0.91 in 2015Q3. The ratio is negative, as 73 funds sold all Transocean LTD shares owned while 133 reduced positions. 35 funds bought stakes while 118 increased positions. They now own 248.53 million shares or 17.03% more from 212.36 million shares in 2015Q3.

Arosa Capital Management Lp holds 5.42% of its portfolio in Transocean LTD for 3.23 million shares. Steadfast Advisors Lp owns 468,060 shares or 2.68% of their US portfolio. Moreover, Steadfast Capital Management Lp has 2.61% invested in the company for 11.05 million shares. The Virginia-based Athena Global Investors Llc has invested 2.18% in the stock. Vollero Beach Capital Partners Llc, a New York-based fund reported 397,218 shares.

Out of 29 analysts covering Transocean Ltd (NYSE:RIG), 2 rate it a “Buy”, 22 “Sell”, while 13 “Hold”. This means 5% are positive. Transocean Ltd has been the topic of 34 analyst reports since August 7, 2015 according to StockzIntelligence Inc.

Article from Wallstreet Hints and News

Technical Picture:

RIG 4H Chart 5/17

(click to enlarge)

As we can see in the 4H chart RIG has been falling in 2015 along with the drop in oil prices. As oil prices rallied in 2016, TIG has also stabilized. Over the past couple of months, price action has formed a large triangle. 

The inability of the 4H RSI to hold above 40 after it went above 70 shows inability of the market to develop bullish momentum. Instead it is choppy and more or less sideways. In this scenario, we might find buyers as price gets to 9.00 and tests the triangle support, if we also see a bullish divergence between the 4H RSI and price.