Although many energy stocks have rebounded from oil's sudden and swift decline, the oil services stocks – and Transocean in particular – can't seem to get out of their own way. Transocean is the third-worst performing stock in the S&P 500 index this year, down almost 40 percent since the start of 2014, and it fell 0.5 percent Friday after the company said it would delay third-quarter earnings and take a $2 billion charge.
For those watching "Talking Numbers" on a regular basis, this should come as little surprise. Three weeks ago, David Seaburg, head of equity sales trading at Cowen and Company, and "Talking Numbers" contributor Richard Ross both predicted trouble for Transocean.
With the price of crude oil now down 24 percent in the last four months to around $79 per barrel, things may only get worse.
"They're getting it from all sides," said Gina Sanchez, founder of Chantico Global. She notes the company ordered dozens of new vessels before oil prices fell and have several rigs that are now sitting idle.
"The outlook for them looks pretty bleak," she said, "especially as oil prices don't really look like they're going to gain any purchase any time soon."
Sanchez doesn't see any reason to step up and buy the stock now. "You're catching a falling knife," she warns. "There's value and then there's cheap for a reason. Right now, I think this company is cheap for a reason."
The technicals on Transocean are also bearish, according to Todd Gordon, founder of TradingAnalysis.com. Based on his chart work, the stock threatens to test a low set in 1999 just below the $26 per share. It was a level that was tested once before in the early part of the last decade.
"Technically speaking, triple bottoms are not statistically significant," Gordon said. However, "I think that is going to be an attraction level for stop-loss sellers."
What may push the stock down further may be things well beyond Transocean's control.
"Aside from the micro headwinds that this company faces, we have the macro headwinds," Gordon said. "We have the strengthening dollar. We have falling oil. We have a market that is going to begin withdrawing liquidity at some point in the future [due to Fed policy] and that's just going to add to the macro forces pushing this stock lower."