Above Resistance: Diamond Offshore Drilling

Published on Monday, 30 July 2012 05:40 Written by TradersHuddle Wire

New York, July 30th (TradersHuddle.com) - Shares of Diamond Offshore Drilling, Inc. (NYSE:DO) closed the session at $67.19 just above calculated resistance at $66.83. The stock effectively broke out and grasped the attention of momentum traders, which could eventually push the stock to a different trading range.

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.

The stock was trading in a well defined range with support at $63.45 and resistance at $66.83. Given that this range was broken, traders will be closely monitoring Diamond's price action to gather clues on the future direction.

From a technical perspective, it can be expected that previous resistance becomes support, as the new range gets defined. However, given that Diamond Offshore Drilling is still near the broken resistance level, traders will be focusing on the $66.83 level to see if the stock holds the breakout without rolling over.