Trading Idea: Is Diamond Offshore Drilling close to Support?

Published on Tuesday, 08 May 2012 05:52 Written by TradersHuddle Wire

New York, May 8th (TradersHuddle.com) - Shares of Diamond Offshore Drilling, Inc. (NYSE:DO) are trading very close to calculated support at $63.70 with price action closing at just $65.06 and placing the stock near levels where traders will start paying attention.

Diamond's stock range is defined by its calculated support defined at $63.70 and by the resistance level at $69.97, which should be used by traders planning their trades. These support and resistance levels are based on a peaks and troughs algorithm of the stock's price action.

Traders wanting to establish a position should pay close attention to Diamond's price action, and establish it as close to support as possible, but only after buying materializes. Traders should understand that the resistance point at $69.97 might limit their upside, however, if the stock breaks resistance, it could be a good point to add to the position.

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.