Lets start off with levels. I set resistance at a previous high of $4.36-4.38, take notice of multi-tops on open May 3, 4 5. I figure, retracing back to this testing point will be my gain. Support levels established on May 9th . This day is critical for the setup. The 9th opened on new lows and tested a from April 19th and 26th at roughly the $3.70-$3.75 mark. 10:30 AM to 11:00 AM on the 9th was rough on the Bulls, and Bears had all to gain. Tier 1 established here at $3.75 Later on in the day on the 9th , downward momentum death-dropped the price to $3.54, thus I established this as Tier 2 Support of $3.55 when it began retracing to neutral territory. Overall, despite the 9th performing badly, it signaled trend reversal and began plotting the trend-lines.
Initially, I thought the overall trend is just going to be an waiting for the resistance breakout. On 05/05/16 it broke the dashed blue long term trend-line. (Yellow Circle) No hope. Elliot-Wave? Nope. So, then maybe perhaps it is an expanding triangle pattern? (Resistance & Solid Blue Downtrend). Kind of... Upon further inspection it was so simplistic I missed it. Ascending and expanding triangle combo. Reverse pennant/flag pattern. The is decreasing on each gap day, the sellers are in control and a significant portion of S/RSI is over-bought.
At 3:45 P.M. on 05/11/16 I entered at $3.95. I followed the sellers (sharp drop in S/RSI in power-hour) and I expected overnight to gap-down and boost on the ascending . This is inherently risky because I knew I had to dump quickly in the morning. Stop-loss of 0.12 cents per share. I wanted 0.19 to 0.20 cents per share. Optimistic target of 0.40 cents. Hey! You can always dream. I overslept pre-market. My auto-alert started to exit my shares at $4.11. I had one block exit at $4.15. I missed top, but lucky did not stick around to eat dirt afterwards.
Short-Term Prospectus: - Paraphrasing from Motley Fool + My own thoughts.
Tread cautiously. This past Tuesday, 05/10, U.S. equities had their biggest gains in two months after the Chinese government cut interest rates to boosts it's economy. All industrial sectors of the S&P 500 closed higher, with some of the biggest gains in energy. FX:USOIL & FX:UKOIL prices are holding steady. In addition to news stories, I would also speculate that the fire in Fort McMurray creates a short term oil production shortage and increased demand in the Americas. Last year or a few years ago if I recall, the company launched its newest fleet of drilling vessels that are top of the line in cutting edge technology compared to other offshore drilling companies.
On the Flip-side: According to John Persinos,
"The analyst consensus is that Seadrill's adjusted per share will come in at 39 cents, compared with 71 cents in the same quarter a year ago. Adjusted E.P.S for the next quarter is pegged at 38 cents, compared with 79 cents in the year-earlier quarter all of 2016, E.P.S is projected to reach $1.30, compared with $2.27 in 2015."
Terrible projections for growth. The company also has debt-to-equity ratio of 1.17, tallying nearly $11.1 Billion of interest bearing debt, $8.3 billion of which is secured largely by liens on drilling vessels. Lucky, it has recently negotiated a deal to refinance it's debt.
- Delays the maturity of $950 million in total debt due in June and December 2016 to December 2016 and May 2017.
- Delays the maturity of $2 billion debt of subsidiary North Atlantic Drilling Ltd. from April 2017 to June 2017.
- Agreed to not draw any more cash from its revolving credit facility and would retain at least $250 million in liquidity.
June and July will be the make it or break it for both NYSE:CHK & NYSE:SDRL since both companies correlate very well against each other. We can expect high volatility and opportunities to ride the price waves in the future.