Oceaneering International, Inc. provides engineered services and products to the offshore oil and gas industry worldwide. The company’s Remotely Operated Vehicles (ROVs) segment offers submersible vehicles for drilling support in the oil and gas industry. The company’s Subsea Projects segment performs subsea oilfield hardware installation and inspection, maintenance, and repair services. Its Asset Integrity segment offers asset integrity services to enhance the reliability and safety of their facilities onshore and offshore, as well as third-party inspections to customers in the oil and gas, petrochemical, and power generation industries. The company’s Advanced Technologies segment offers project management, engineering services, and equipment for applications in non-oilfield markets.
Take a look at the 1-year chart of Oceaneering (NYSE: OII) below with my added notations:
Over the past 4 months OII has formed an inverse head and shoulders reversal pattern (green). I have noted the head (H) and the shoulders (s) to make the pattern more visible. The stock’s neckline resistance is at the $35 level (red). OII will confirm its H&S if it breaks through the neckline.
Keep in mind that simple is usually better. Had the inverse H&S pattern never been pointed out, one would still think OII was moving higher simply if it broke through the $35 resistance level.
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The Tale of the Tape: OII has formed an inverse head & shoulders pattern. A long trade could be entered on a break through the $35 level.
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!
Christian Tharp, CMT
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