In looking at many different scans over the weekend, one of the main themes that kept showing up is that the energy sector looks poised. Most of the good consolidating setups making the cut happen to be energy stocks. One of the names that made the short list last week is Diamond Offshore Drilling (DO) however this week, it looks even better due to gap filling consolidations.
Therefore, this week we cannot ignore the setup in Diamond Offshore Drilling (DO). The stock is showing up on the ubiquitous “Bullish Daily Candlestick Patterns” scan that we refer to often here at Trade Ideas Technologies.
The Trade of the Week in (DO) will be considered live above the suggested resistance of 20.97 shown here in the daily chart (red line) by simply clicking the symbol in this Top List scan. The suggested stop will be under 18.97 which is well above the “swing exit” line on the chart at a lower price. If the price action takes out 18.97 there is no reason in our minds to remain long this name as a higher low would be taken out at 19.05 and we don’t want to see that. The suggested upside target will be 25.00 from areas of congestion in the past for (DO) at that level. Risking 2 dollars to make 4 is the risk/reward scenario here.