1. Several subscribers asked for an opinion on Joy Global (JOY) after it was hammered on Sept. 3, and my view then was simply to sit on your hands and do nothing. Given the severity of selling over the past year, a nearly 70% decline since late-August 2014, I simply can't get excited about stalking the stock on the short side. Still, the chart looks awful and appears to be on the verge of taking out its most recent swing lows.
If you want to chase it short through the Sept. 3 swing lows, do so with a tight stop. Perhaps consider using a stop on close above an eight-day exponential moving average. Beyond that, I'd avoid the stock both long and short, until it tests its $14.30-$15.30 2008/2009 low.
2. Transocean (RIG) traded as low as $10.50 in afterhours trading on Aug. 25, after announcing the board was moving forward with a plan to suspend the final two dividend payments for the current fiscal year. Since that time, the stock has rallied nearly 41%, closing Thursday's session at $14.82. Afterhours trading is almost always thinner than regular session trading. In this case, only around 23,000 shares traded near that afterhours $10.50 price. Nonetheless, a 41% bounce is impressive.
What's more interesting, especially for traders looking for some semblance of stability in the offshore drilling market, is the stock has recaptured its 50-day simple moving average (SMA). For the record, RIG hasn't been above the 50-day SMA since breaking beneath it on June 11.
The bottom line is the stock still has a ton of supply to chew through between its current price of $14.82 and the mid-May swing high of $21.90. However, a move through $15.11 would amount to a higher swing high. And if one were interested in taking a swing at RIG, a move to a higher swing high would be a logical time to give it a shot. A stop on close beneath a 50-day SMA would provide a simple and logical stop loss point.
Any trading or volume profile related questions can be posted in the comments section below, emailed to me at firstname.lastname@example.org or posted to my twitter feed @ByrneRWS.