Is Diamond Offshore Drilling Resistance Ahead?

Published on Thursday, 17 May 2012 05:36 Written by TradersHuddle Wire

New York, May 17th (TradersHuddle.com) - Diamond Offshore Drilling, Inc. (NYSE:DO) closed the trading session at $59.75, near its 200 day moving average set at $62.63. Diamond's stock action is below this level, which makes the stock difficult to be bought, as it will face resistance as it approaches its 200 day moving average.

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.

Latest price action range, defined by a peaks and troughs algorithm, placed calculated support at $62.79 and resistance at $69.97. Traders should closely monitor these levels, as they provide great reference points for the latest price action in Diamond Offshore Drilling.

If traders want to establish a position on Diamond Offshore Drilling, given that resistance could materialize as the stock approaches its 200 day moving average, a trade might materialize as the stock manages to break this important level. After the breakout, the 200 day moving average could be used as support going forward. However, until the break materializes, traders need to exercise patience.