After a severe, correction going on 2 years, Diamond Offshore Drilling (DO) has built a nice big base. With Crude Oil approaching $50, the sentiment against oil seems to be losing energy. These big bases are important in the stock trend. Anyone who bought since last July is breakeven or better. We can see the SCTR ranking is stubbornly strong up around the 75 level. The Relative Strength line in purple is trying to break out to 10 month highs. Both of those traits are bullish.
âThe volume seems to be losing a little momentum here but still in the range of 2 Million shares/day. The MACD is trying to turn up again while it is above zero. A fresh turn up on the MACD as the stock breaks out would be very bullish. However, until this stock firmly takes out $25, it could continue to spend more time base building. This is one of those stocks that could need a longer term perspective but it definitely looks like one for the watchlist.
Good trading,
Greg Schnell, CMT, MFTA
