According to the company’s website, Oceaneering International Inc. “is a global oilfield provider of engineered services and products primarily to the offshore oil and gas industry, with a focus on deepwater applications”. Between April 1986 and October 2013, Oceaneering’s stock price rose from as low as $0.22 to as high as $87.64. However, the last three years have been far from rosy for the shareholders, who saw the stock declining to $24.33 last month. So, are the bears done and is it time to jump on board, while the stock is relatively cheap now? The Elliott Wave Principle can give us a clue.
The monthly log chart of Oceaneering International stock shows the entire uptrend since 1986. As visible, it could easily be seen as a five-wave impulse, labeled I-II-III-IV-V. Furthermore, the impulsive structure of wave I is can be seen, as well. According to the theory, every impulse is followed by a three-wave correction in the opposite direction. That is what we believe has been in progress since the top in 2013 – a large degree A-B-C retracement in the position of wave (II). Unfortunately for investors, Oceaneering’s corrective decline does not seem to be over yet, because waves B and C remain. Wave (II) could be expected to find support near the termination area of wave IV of (I), which means levels between $13 and $9 should be reached by wave C. Now let’s take a look at the daily chart and see what we could expect in the short term.
Oceaneering’s daily chart shows the stock’s decline in the past three years. Turns out, wave A of (II) already has a complete five-wave structure, which means wave B to the north should begin soon. It is very important that investors do not get tempted to buy this recovery, because once wave B is over, they might get slaughtered by the following wave C down. Good opportunities to invest in Oceaneering International would occur at the end of wave C of (II), but we will have to wait a while for them.
