Atwood Oceanics, Inc. (NYSE: ATW)

“Today’s Big Stock” is now live on Facebook!! The TBS page will be used to highlight all things technical analysis and to provide alerts when potential TBS trading opportunities appear or important market moves occur. Be one of the first to like the page to receive live updates and articles!

Click here to be one of the first to like the page to receive live updates and articles!

Atwood Oceanics, Inc., an offshore drilling contractor, engages in the drilling and completion of exploratory and developmental oil and gas wells. The company owns a fleet of approximately 11 mobile offshore drilling units primarily located in the United States, Gulf of Mexico, the Mediterranean Sea, offshore West Africa, offshore Southeast Asia, and offshore Australia. It also has three ultra-deepwater drill ships, and two high-specification jack ups under construction. The company was founded in 1968 and is headquartered in Houston, Texas.

To review Atwood’s stock, please take a look at the 1-year chart of ATW (Atwood Oceanics, Inc.) below with my added notations:

ATW

After a sever sell-off from March until June, ATW worked it’s way up to $50 and has now stalled within a common rectangle pattern. Rectangle patterns form when a stock gets stuck bouncing between a horizontal support and resistance. A minimum of (2) successful tests of the support and (2) successful tests of the resistance will give you the pattern. ATW’s rectangle pattern has formed a $50 resistance (red) and a $44 support (green). A break above $50 would also be a new 52-week high.

The Tale of the Tape: ATW has formed a rectangle pattern. The possible long positions on ATW would be either on a pullback to $44, or on a breakout above $50. The ideal short opportunity would be on a break below $44.

Before making any trading decision, decide which side of the trade you believe gives you the highest probability of success. Do you prefer the short side of the market, long side, or do you want to be in the market at all? If you haven’t thought about it, review the overall indices themselves. For example, take a look at the S&P 500. Is it trending higher or lower? Has it recently broken through a key resistance or support level? Making these decisions ahead of time will help you decide which side of the trade you believe gives you the best opportunities.

No matter what your strategy or when you decide to enter, always remember to use protective stops and you’ll be around for the next trade. Capital preservation is always key!

Good luck!

Christian Tharp, CMT