The USD 35.5 support area, currently tested, might facilitate a technical rebound. The company’s fundamentals could validate this scenario.

From a fundamental viewpoint, the security is cheap with a P/E ratio of 6.3x for 2013 and 10x for 2014. EPS revision are clearly upward oriented for 2013 which gives a potential on the market for the stock.

Technically, in daily data, even if moving averages are still in a downtrend, the support of USD 35.5 and the trendline give arguments to anticipate a recovery of Seadrill. This mid-term support is an excellent point to buy the share with a 8% potential (USD 38.5).

The trading strategy can benefit from the proximity of the strong support currently tested in order to buy Seadrill in a good timing. Investors might place a stop loss order at USD 34.4 in order to avoid important losses and will target the short term resistance at USD 38.5.