I think we will rally in both next week. The recent fleet status reports were OK...things are getting renewed and yes with day rates reduced....but still nowhere near the doom and gloom scenario. We had analysts making assumptions that rigs would be idled as they came up for renewal...by and large that has not been the case, and there are still strong pockets where renewals are at existing rates and newbuilds are getting the expected great rates near peak.
Almost got to the 31 number, but there seems to be an aggressive shorter in NE who pounds it down. It's lagging DO, ESV, RIG and SDRL by a good amount. I say a shorter just from watching the trading. I think it is being singled out for shorting because DO has squeezes, ESV is more peppy and responds to up markets, RIG's got some big marquis activists pushing for higher divi's etc, and SDRL people like because of the age of their fleet, so they pick on NE.
As you no doubt know, all the recent earnings reports, even the good ones like NE's and RIG's upside surprises have been met with no respect. So I'd pretty surprised to see SDRL do anything to change that negative trend.
I have been more conservative with the calls, selling some 5/23 and 5/30 $32.50s up thru $33.50s on part of my position. Your calls play is bolder, and looking pretty astute at the moment. I have been more confident selling puts, I feel like the support below 30 is both obvious and long-standing.
This fleet has one of the highest utilization rates in the industry during a dry time . . . another reason I chose it above the competition when it came time to invest in this industry. I don't know how they do it, but they seem to be able to make money on lower bids than the competitors while still doing a better job. I suspect every one of those new ships rolling out of China will be rolling right to a job.