Will Transocean go under?
Yesterday, I watched the movie DEEPWATER HORIZON in my dolby surround home cinema.
It was an experience of the special kind.
So, today I had to go to my chart library and have a look at Transocean, the company which was implicated in the Deepwater Horizon oil spill resulting from the explosion of one of its oil rigs in the Gulf of Mexico.
Anyone who believes that fundamental news are the cause of financial market moves point to the decline as it unfolded from May to December 2008 as the result of the Deepwater Horizon disaster. But, this was not the disaster. This decline occured when the company moved its headquarter to Switzerland.
The Deepwater Horizon is marked on the chart with the arrow.
The way how the stock “reacted” to the disaster has to be seen in the context of the previous secular uptrend in the stock, which carried the stock from a few dollars to the peak at 163 in May 2008.
The Deepwater Horizon disaster was quickly retraced as the stock rose from 41 in June 2010 to 86 in March 2011. Thereafter, the secular downtrend resumed.
In fact, Transocean has been in a secular downtrend ever since the high in 2008. Moving to Switzerland has not helped the company.
The two charts below show the most recent development.
Following the new low at 6.33 on 26.12.2018 the stock entered a rebound.
It desperately needs a rise above 9.50 to signal somewhat more than just another tehnical rebound.