The S&P Effect is when a share price goes up when it is added to the S&P. Today's announcement helped push Transocean into a new territory. This I feel will be helping it on its way back to its past highs.
This index is one of the most watched by the worlds money women and men. The stock rallied around approx. 5.4% (Oct 22, '13). The stock will be added on Oct 28, so I gauge there will be room to further increase in price value.
RECAP (please read other SeekAlpha articles):
RIG has strong fundamentals, plenty of growth and perhaps a competitive edge in the deep water and ultra-deep water arena. There are 'catalysts' other writers who have given good analysis propose.
According to research from '78-'98 (Cooper, 2001) evidences initial price increases post-addition to the S&P alongside greater price volatility. The S&P addition often will also show some price reversal.
The overall permanent price gain for RIG is expected to follow like most an upward momentum.
Disclosure: I bought RIG at the $44 level, then again recently averaged up. I am holding 'Long'.
Disclosure: I am long RIG.
Additional disclosure: Analyst target $58. (Icahn had bought 6% of this stock)