Seadrill Ltd : Back on an important support
Entry price | Target | Stop-loss | Potential |
---|
$35.78 |
$0 |
$33.9 |
-100% |
---|
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.
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