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Two Energy Stocks Running Hot as Momentum Indicators Flash Warning Signs

MarketDash Editorial Team
10 days ago
Transocean and NGL Energy Partners are trading in overbought territory with RSI readings above 71, signaling potential near-term pullbacks despite strong recent performance and positive earnings reports.

When stocks run too hot, too fast, they often need a breather. That's the situation facing two energy sector players as of November 28, 2025, both flashing warning signs for investors who pay attention to momentum indicators.

The Relative Strength Index measures momentum by comparing a stock's performance on up days versus down days. Think of it as a fever thermometer for stocks. When the RSI climbs above 70, traders typically view the asset as overbought, meaning it might be due for a pullback regardless of how great the underlying story looks.

Here are two energy stocks currently in the danger zone.

Transocean LTD

Transocean (RIG) delivered quite the performance recently. On October 29, the offshore drilling company reported third-quarter earnings and revenue that beat Wall Street expectations. President and CEO Keelan Adamson highlighted the company's operational strength and cash generation, noting some major financial housekeeping ahead.

"In addition to delivering an outstanding quarter of operational performance and Free Cash Flow generation, we took decisive steps to accelerate debt reduction and improve our financial flexibility," Adamson said. "Along with meeting scheduled maturities, these transactions are expected to, respectively, reduce total debt by approximately $1.2 billion by the end of 2025; annual interest expense by approximately $83 million; and restricted cash by $52 million."

The stock has climbed around 15% over the past month and currently sits near its 52-week high of $4.45. Shares rose 6.2% to close at $4.30 on Wednesday.

RSI Value: 71.1

Momentum Score: 78.49

NGL Energy Partners LP

NGL Energy Partners (NGL) has been on an even wilder ride. On November 4, the company reported second-quarter sales results that exceeded expectations, sending the stock on a tear. Over the past month alone, shares have surged approximately 53%, approaching the 52-week high of $10.29.

CEO Mike Krimbill was enthusiastic about the quarter's results and the company's trajectory. "This has been an outstanding quarter for NGL with success on multiple initiatives that we believe will ultimately increase value to our Unitholders. Our current Water Solutions business continues to outperform and is experiencing accelerated growth. In addition, we are redeeming additional Class D Preferred equity and buying common units at attractive prices. On the heels of the momentum, we are projecting Fiscal 2027 Adjusted EBITDA in excess of $700 million."

Shares rose 4.5% to close at $9.85 on Wednesday, but the momentum indicator suggests caution ahead.

RSI Value: 71.8

Both companies have legitimate reasons for their recent rallies—strong earnings, debt reduction plans, and optimistic forward guidance. But momentum indicators exist for a reason. When stocks get this hot, even good news might not be enough to keep them climbing in the short term. Traders watching these names should keep the overbought readings in mind as they evaluate their next moves.

Back to News

Two Energy Stocks Running Hot as Momentum Indicators Flash Warning Signs

MarketDash Editorial Team
10 days ago
Transocean and NGL Energy Partners are trading in overbought territory with RSI readings above 71, signaling potential near-term pullbacks despite strong recent performance and positive earnings reports.

When stocks run too hot, too fast, they often need a breather. That's the situation facing two energy sector players as of November 28, 2025, both flashing warning signs for investors who pay attention to momentum indicators.

The Relative Strength Index measures momentum by comparing a stock's performance on up days versus down days. Think of it as a fever thermometer for stocks. When the RSI climbs above 70, traders typically view the asset as overbought, meaning it might be due for a pullback regardless of how great the underlying story looks.

Here are two energy stocks currently in the danger zone.

Transocean LTD

Transocean (RIG) delivered quite the performance recently. On October 29, the offshore drilling company reported third-quarter earnings and revenue that beat Wall Street expectations. President and CEO Keelan Adamson highlighted the company's operational strength and cash generation, noting some major financial housekeeping ahead.

"In addition to delivering an outstanding quarter of operational performance and Free Cash Flow generation, we took decisive steps to accelerate debt reduction and improve our financial flexibility," Adamson said. "Along with meeting scheduled maturities, these transactions are expected to, respectively, reduce total debt by approximately $1.2 billion by the end of 2025; annual interest expense by approximately $83 million; and restricted cash by $52 million."

The stock has climbed around 15% over the past month and currently sits near its 52-week high of $4.45. Shares rose 6.2% to close at $4.30 on Wednesday.

RSI Value: 71.1

Momentum Score: 78.49

NGL Energy Partners LP

NGL Energy Partners (NGL) has been on an even wilder ride. On November 4, the company reported second-quarter sales results that exceeded expectations, sending the stock on a tear. Over the past month alone, shares have surged approximately 53%, approaching the 52-week high of $10.29.

CEO Mike Krimbill was enthusiastic about the quarter's results and the company's trajectory. "This has been an outstanding quarter for NGL with success on multiple initiatives that we believe will ultimately increase value to our Unitholders. Our current Water Solutions business continues to outperform and is experiencing accelerated growth. In addition, we are redeeming additional Class D Preferred equity and buying common units at attractive prices. On the heels of the momentum, we are projecting Fiscal 2027 Adjusted EBITDA in excess of $700 million."

Shares rose 4.5% to close at $9.85 on Wednesday, but the momentum indicator suggests caution ahead.

RSI Value: 71.8

Both companies have legitimate reasons for their recent rallies—strong earnings, debt reduction plans, and optimistic forward guidance. But momentum indicators exist for a reason. When stocks get this hot, even good news might not be enough to keep them climbing in the short term. Traders watching these names should keep the overbought readings in mind as they evaluate their next moves.