Don't Ignore This Chart!

Diamond Offshore Drilling (DO) Starts Floating

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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.

​The 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

Greg Schnell
About the author: , CMT, is a Senior Technical Analyst at StockCharts.com specializing in intermarket and commodities analysis. He is also the co-author of Stock Charts For Dummies (Wiley, 2018). Based in Calgary, Greg is a board member of the Canadian Society of Technical Analysts (CSTA) and the chairman of the CSTA Calgary chapter. He is an active member of both the CMT Association and the International Federation of Technical Analysts (IFTA). Learn More
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