New York, October 15th (TradersHuddle.com) - Diamond Offshore Drilling, Inc. (NYSE:DO) closed the trading day at $66.58, near its 50 day and 200 day moving averages set at $67.19 and $64.36 respectively. Diamond's price action placed the stock above the 200 day moving average but below its 50 day moving average, a setup that signals a possible break out.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 Offshore Drilling seems to be setting up for a tight range between the 200 day moving average as support and the 50 day moving average serving as
A tiered approach, appears to be the best strategy to maximize possible movements in the stock, as traders could establish a small position in Diamond Offshore Drilling and wait for the stock to break out above its 50 day moving average at $67.19. Then they could add to the position as momentum builds with the breakout. On the flip side, if support being referenced at the 200 day moving average set at $64.36 breaks, it could signal further downside pressure for Diamond Offshore Drilling.