Diamond Offshore Drilling (DO): Pulling the Layers Back For The Chaikin Oscillator

The DAX managed a slight gain of 0.20%, while the FTSE 100 was underperforming after strong labor market data lifted yields. The index has lifted off lows, but remains down 0.42% on the day. 

Stocks were struggling going into the Federal Reserve announcement, with markets still split on the risk of an accelerated rate path. US stock futures were moving sideways. 

Asian markets initially moved higher, as energy related stocks got a boost from higher oil prices, but Hang Seng and CSI 300 lost earlier gains later in the session and closed with losses of 0.43% and 0.41%, respectively. Japan was closed for a holiday.

Tracking shares of Diamond Offshore Drilling (DO), we have seen that the Chaikin Oscillator reading is currently below zero. Traders following the stock may be on the lookout for possible bearish momentum.

As any seasoned investor knows, markets can move up or down in the blink of an eye. Investors who attempt to beat the market without creating a plan may find themselves grasping at straws down the line. Building a plan that included the right level of risk may be different for every individual. Managing risk and staying on top of the stock portfolio can help investors ride out the storm when it eventually rolls in. Anybody who manages their own portfolio knows that it can be extremely challenging at times. Finding a consistent process that works when markets become volatile can be a big help to the investor. Controlling emotions and conducting the necessary research can help the investor make the difficult decisions when they crop up.

Diamond Offshore Drilling (DO) currently has a 14-day Commodity Channel Index (CCI) of -134.93. Dedicated investors may choose to use this technical indicator as a stock evaluation tool. Used as a coincident indicator, the CCI reading above +100 would reflect strong price action which may signal an uptrend. On the flip side, a reading below -100 may signal a downtrend reflecting weak price action. Using the CCI as a leading indicator, technical analysts may use a +100 reading as an overbought signal and a -100 reading as an oversold indicator, suggesting a trend reversal.

Currently, the 14-day ADX for Diamond Offshore Drilling (DO) is sitting at 25.52. Generally speaking, an ADX value from 0-25 would indicate an absent or weak trend. A value of 25-50 would support a strong trend. A value of 50-75 would identify a very strong trend, and a value of 75-100 would lead to an extremely strong trend. ADX is used to gauge trend strength but not trend direction. Traders often add the Plus Directional Indicator (+DI) and Minus Directional Indicator (-DI) to identify the direction of a trend.

Tracking other technical indicators, the 14-day RSI is presently standing at 32.12, the 7-day sits at 23.09, and the 3-day is resting at 22.98 for Diamond Offshore Drilling (DO). The Relative Strength Index (RSI) is an often employed momentum oscillator that is used to measure the speed and change of stock price movements. When charted, the RSI can serve as a visual means to monitor historical and current strength or weakness in a certain market. This measurement is based on closing prices over a specific period of time. As a momentum oscillator, the RSI operates in a set range. This range falls on a scale between 0 and 100. If the RSI is closer to 100, this may indicate a period of stronger momentum. On the flip side, an RSI near 0 may signal weaker momentum. The RSI was originally created by J. Welles Wilder which was introduced in his 1978 book “New Concepts in Technical Trading Systems”.

Taking a peek at some Moving Averages, the 200-day is at 13.72, the 50-day is 10.70, and the 7-day is sitting at 10.18. The moving average is a popular tool among technical stock analysts. Moving averages are considered to be lagging indicators that simply take the average price of a stock over a specific period of time. Moving averages can be very useful for identifying peaks and troughs. They may also be used to help the trader figure out proper support and resistance levels for the stock.

Diamond Offshore Drilling (DO)’s Williams Percent Range or 14 day Williams %R presently is at -86.26. In general, if the reading goes above -20, the stock may be considered to be overbought. Alternately, if the indicator goes under -80, this may show the stock as being oversold. The Williams %R indicator helps show the relative situation of the current price close to the period being observed.

Investors may be trying to gauge the current business cycle phase and how that could potentially impact the portfolio. Business cycles can be one way to analyze portfolio performance. Early on in the cycle, profits tend to grow rapidly, sales tend to improve, and activity rebounds. In the middle of a cycle, growth may be peaking, strong credit growth may still be seen, and policy may swing neutral. Toward the later stages, growth may be moderate, earnings may come under pressure, and credit may tighten. Heading into a period of recession, credit may completely dry up, profits may decline sharply, and there may be policy easing. Investors will often have to adjust portfolio holdings that reflect the current state of a business cycle.