Well standards and poor cut RIGS credit rating from a BBB to a BBB- and put their outlook as negative for the company.. They cited that the acquisition of Aker Drilling in a time of soft economic times and the potential exposure to the Gulf spill puts them at significant risk... OK SO WHAT????
Standard and Poors.. the same company that cut the U.S. rating... Standard and Poors.. the same company that is now DISCREDITED THEMSELVES!! Standard and Poors is NOT the STANDARD anymore! They have lost a huge amount of credibility over the last few months so no one really cares what they have to say anymore....
If you read my other posts you would see what I had to say about RIG, this economy, when to buy it and for how long to hold onto it.. I hope you all took my advice and bought the other day when it hit in the 43 range... DOLLAR COST AVERAGE over the next three months between 40-49 and you will profit big time all while earning a 7% dividend to boot!!
The market will wash out next week when ALCOA reports earnings first to kick off earnings season... USE THAT AS AN OPPORTUNITY to start buying RIG, GE, AND VERIZON!! GREAT CASH COMPANIES THAT PAY A GREAT DIVIDEND!!! In turbulent economic times ALWAYS FOLLOW THE CASH!!
drag, market works in 4 stages, consolidation, uptrend, peak, decline. Unless you are buying for the very long term 15yrs+, then buying now is fruitless. Nearly every poster here said RIG would never go to the $40s (except a few bashers), but not only did RIG go to the $40s, it did it on increasing volume (go look at the 60min chart). You never buy on the decline, never, if you are trading, never. RIG is in stage 4 decline. RIG has to STOP declining and start consolidating. When you see that, then put it on your watch list. When it breaks out of the consolidation (and you will know that by the volume), then you start buying. That is how the institution do it.
Since the market is in a bear market within a secular bear market, I would say you need to be look for potential short candidates in the event the market begins to decline again. Right now, the SPX 50 DMA crossed under the 200 DMA (AUG), is declining with increasing volume and is now resistance. All ominous signs.
Thanks for your objective counter argument post. I've Followed RIG since 1999. I'm happy to buy RIG under $50 but this last move downward to $44 area demonstrated RIGs weekness relative to other drillers. So even a RIG fanboy like me is worried RIG could fall back to 2008, 2009 & last springs panick $42 lows. People seem to want to keep rationalizing why poor last quarter report and S&P downgrade is just the work of stupid people. This is felling like 2002-2003 in which RIG fell back into the low $30 range. RIGs deepwater dominance and financial strength seem to be on the decline relative to a DO, ESV or SDRL (which has what looks to me as the industries best trend technicals and dividend of 10%). SDRL is already at double it's 2005 price level will RIG is still at 1/2 it's 2005 level. And just look at todays open people sold right into the tiny little 0.75 cent pop. Meanwhile SDRL is holding it's 4 day pop.