Hamilton's E-Wave Analysis

SDRL, Seadrill Ltd.

SDRL may 9 2015 b

Seadrill Ltd. NYSE is a company that drills in the sea. The name is appropriately chosen. I have never heard of it but using the Dogs of the Dow screen for most active and worst performer for the year, this one ranks number 2 with a price drop (today) of 62%. At the low that would, according to my calculation, have been just over 80%.

Their mission is to safely unlock energy for our clients anywhere. . . . . .  Sounds almost like an investment dealer except that these people unlock the energy (value) for their clients as opposed to from their clients. In any event business is, not so surprisingly given the price of oil, less than stellar of late. In EW terms it looks like a full A-B-C correction. Considering the size of the drop, there is no compelling reason to assume that it has to go lower, whereas the structure suggests that there may well be a compelling reason for it to go higher. Waves A and C relate to each other by roughly a factor of 2.6 which is normal. The first leg up from the low is a clear 5 wave sequence which should be wave 1 of a new bull. Wave 2 should retrace about 60% of one, from $8.45 to $15.44, so to $11.10, close to $10.93 of the 4th wave. When and if it gets there this stock should be bought. An initial target should be in the area of $18 where C=A, but probable more like $20 in order to close the second gap.

The other day Janet Yellen actually opined that stocks were overvalued, this after this confession was teased out  by none other than Christine Lagarde. Nobody seems to have taken notice but the ladies were definitely not thinking about Seadrill.