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Another Chance to Buy DO

by Sam Collins 11/02/09

Diamond Offshore Drilling (DO) -- This worldwide offshore oil and gas drilling contractor has formed a massive bottom known as a cup-and-handle, which is a very bullish formation. The cup-and-handle bottom, coupled with a golden cross, which is also bullish, makes this chart look like a winner.

Diamond Offshore Drilling Chart

Chart Legend

On Sept. 22, I said, "In order for DO to make the final breakout, it must follow through on the penetration of the triple-top at $94.50. The current round of profit-taking gives us an excellent opportunity to buy DO, because the rebound should take it to at least $110.

DO broke the triple-top and ran to just under $110 early in October. But profit-taking has again driven the stock down to our buy point under $95.

DO pays a dividend of $8 per share, giving it a dividend yield of 8.59%.

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