Monday, 24 November 2014

RIG, SDRL - drillers remain broadly weak

Despite the main market remaining strong, there remains broad weakness in energy stocks. The oil/gas drillers of Transocean (RIG) and Sea Drill (SDRL) settled lower by -1.3% and -2.9% respectively. Mid term outlook is bearish into spring 2015.

RIG, daily

SDRL, daily


Suffice to say, considering the broader equity market, the energy sector remains very weak.... but then... Oil itself continues a multi-month down wave.

If Oil $66/60 in early 2015, then the oil/gas drillers will continue to decline.

Most bearish downside targets...

RIG, 20/17
SDRL 12/10.. although the latter would likely require some degree of major downward revision for 2015 profits.

I am long term bullish on both companies, but until Oil levels out, there seems no point in getting involved on the long side.