Approaching Resistance - Diamond Offshore Drilling

Published on Tuesday, 07 February 2012 05:48 Written by TradersHuddle Wire

New York, February 7th (TradersHuddle.com) - Shares of Diamond Offshore Drilling, Inc. (NYSE:DO) are trading very close to calculated resistance at $64.00 with the current price action closing at just $63.35 placing the stock near levels that make it difficult to buy.

Diamond Offshore Drilling, Inc. (NYSE:DO) drills offshore oil and gas wells on a contract basis. The Company is a world-wide deep water driller that serves markets that include the deep water, harsh environment, conventional semisubmersible and jack-up markets.

Diamond's current stock range is defined by current calculated support defined at $52.98 and by the resistance level at $64.00, the stock is clearly over-extended from support, making it difficult to establishing new long positions at this level.

Traders don't have a clear entry point for Diamond Offshore Drilling, as the stock is well above support, however, as the stock pulls back towards $52.98 it will definitely provide a reference point to establish a trade. On the other hand if the stock decides to break above resistance level at $64.00 then traders will get an opportunity to enter Diamond Offshore Drilling stock by establishing a position as the stock moves to a higher range.