Diamond Offshore Drilling Is Near a Key Resistance Area

Published on Tuesday, 07 August 2012 05:52 Written by TradersHuddle Wire

New York, August 7th (TradersHuddle.com) - Shares of Diamond Offshore Drilling, Inc. (NYSE:DO) are trading very close to calculated resistance at $67.68. The stock ended the trading session at just $67.12, which is near levels that make it difficult to buy or start a 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.

Diamond's stock range is defined by its calculated support defined at $63.45 and by the resistance level at $67.68; the stock is clearly over-extended from support, making it harder for participants to establish fresh longs.

Traders don't have a clear entry point for Diamond Offshore Drilling. However, as the stock pulls back towards $63.45 it will definitely provide a reference point to establish a trade. On the other hand, if the stock breaks above its resistance level at $67.68 then traders will get an opportunity to enter the stock as it moves to a higher range.