Trading Diamond Offshore Drilling

Published on Thursday, 02 September 2010 07:16 Written by Christian Paolinetti

New York, September 2nd (TradersHuddle.com) - Shares of Diamond Offshore Drilling, Inc. (NYSE:DO) closed the trading session at $60.91 near its 50 day moving average currently set at $62.34. Diamond's price action is below this important level, which makes the stock difficult to buy, as there will certainly be resistance as it approaches its 50 day.

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 places calculated support at $57.76 and calculated resistance at $60.75. These levels will be closely watched by traders, as they provide great insight into the latest price dynamics defined by Diamond Offshore Drilling shares.

Traders should evaluate their trade if they want to establish a position on Diamond Offshore Drilling given the resistance expected as the stock approaches the 50 day moving average. A trade might materialize as the stock manages to break this important level, as it could be used as support going forward, however until the break materializes buying the stock is nothing different than flipping a coin. Other levels that traders will be evaluating are the ones defined by the peak and troughs algorithm that provides great price level reference points.