Let’s update Diana Shipping (DSX) and also check out Nordic American Tanker (NAT). (March 27, 2013)
DSX NAT
Hey, Dan here at Stock and OptionMarketMentor.com on Wednesday, March 27th. In this video I’m going to revisit Diana Shipping ( $DSX Diana Shipping Inc ) which I talked about yesterday and then we’ll also go to Nordic American Tanker ( $NAT Nordic American Tanker Ltd ), NAT. First of all Diana Shipping ( $DSX Diana Shipping Inc ). I mentioned yesterday Cramer featured this on his “Off the Charts” segment on Tuesday night on “Mad Money.” You can see what happened to this stock today. After hours, as soon as he mentioned that it was trading up about $10.00 or so on something like ninety thousand shares, which isn’t too bad for after-hours trading, that’s the badlands. Then the stock gapped up just a bit, well it actually gapped up a lot from yesterday’s close, but even where it closed after hours it gapped up a little bit more and then is now up at a new high, relative to this chart; obviously not a new high, new high. But anyway, so my question is, to you and to me, is this too late to buy? Well, first of all let’s look at the intraday action and before I forget here’s the thing, I’m really long Diana Shipping ( $DSX Diana Shipping Inc ), I don’t have that much money in it from a dollar standpoint, but I’ve got a boatload of options, of call options out into September. The reason I’m telling you that is this, I don’t want to hear about me pumping a stock or anything like that, I am pumping this stock, absolutely, because I think I’m going to make a lot of money on this stock, I’m planning on it, and I just want to pass that along to you. But what I’m not planning on doing is pushing the stock out trying to move it and then selling into it, that’s not what I do, I have never done that. So again I’ll just tell you, full disclosure, I’m really long this stock and I’m also long Nordic American Tanker ( $NAT Nordic American Tanker Ltd ), which we’ll get to a second. But let’s talk about this trade on Diana Shipping ( $DSX Diana Shipping Inc ). Let’s say you looked at this stock in the morning, and it gapped way up, you didn’t want to buy that. Okay, well that was the correct move because for all we knew this stock could have just traded down. You’re buying it at $10.10 or something like that and then the stock closes at $9.50 and you’re not feeling too good about that. So instead you wait, and you wait for the pullback, and the pullback never comes. Well if you’re looking at it in this time frame then you’re waiting for the pullback, again, I’m assuming that you want to buy the stock. If you don’t want to buy this stock then look elsewhere, but if you’re waiting for an opportunity to buy this stock this is what you really need to watch. You see the stock trading down, now, we have no idea that this is the low, I actually bought more around here; I was kind of buying it on the way down and on the way up. So here’s the thing. You see this stock hitting support, you’re watching it, you’re watching it, you’re watching it and this is all well and good right here. But this was really your signal, when the stock actually broke higher like this, now you can look at this as reliable support and put your stop right underneath there. You see the volume actually ticked up during this five-minute chart. So that move, on heavier than average volume, at least over the past several bars there, was an indication that there was some real buying there. Now you can start buying this stock with confidence and then definitely when it moves above this intraday high, this was back on Friday the 22nd when the stock really spiked up, I’ve changed it to a 15 minute chart, when the stock moves above this level, and I mentioned this in our forum today that you want to watch for this, when the stock moves above this level of $10.63, if I recall correctly, and that was a number that Cramer specified on “Mad Money” too, that if it was about $10.63 you’ve got to just buy this stock. I agree, because what this does is it really illustrates that all these folks down here who bought even during this downturn are winners. They’re not going to be selling because the whole reason they bought this stinkin’ stock was because they’re anticipating making money. So why close a trade when it’s working in your favor? So Diana Shipping ( $DSX Diana Shipping Inc ), if you have a longer time horizon you use this chart, the weekly chart, and you can see the reversal here, it’s a very meaningful reversal. I would suggest just staying long, and I’ll say it again, I’m really long this stock, so I’m just telling you what I’m doing. If you want to fade my trade feel free to do that. I have to laugh at myself because lately, on a lot of trades, the most profitable trade was to hear what Dan was doing and then just take the other side of that trade. But that’s trading and I don’t think you probably want to do that now because I’ve got mojo working. Anyway, back to shipping. Now let’s look at Nordic American Tanker ( $NAT Nordic American Tanker Ltd ). You see the big squeeze here, this is a really good chart, I know it looks a little scary but this is a really massive volatility squeeze, volume was really high on this break out. You look at the daily chart and this thing’s absolutely smoking. Volume is again really high there. After this kind of run, from $9.25 or so, that was just my line for support, where I had initially bought, after this kind of move higher we see this move yesterday, on Tuesday. This is almost a bearish engulfing pattern, not quite but you would expect to see further declines, I would. I was kind of staying away from it because I figured that it probably would. Well then today, we’ll look at the five-minute again, the stock gapped up a little bit and then just kept going. That’s the time that you know, well, I think we’ve got some real strength here, more than we thought about, and so then you start taking this stock. Now I didn’t buy this until the end of the day, just because I wanted to see how the thing would close, because yesterday’s action was so decisive. Then finally I went back to this time frame. Thought you know what? At $11.71 I may be buying a little bit higher than maybe it’ll be in a day or two or not, but I really don’t think I’m late at all, I think actually, given this kind of turn around, I think I’m pretty early. So anyway I hope this helps you in trading these two names. By the way we got a lot of new members yesterday because of an email that we sent out. I want to urge you, if you’re not a member, if you haven’t tried the free trial on Stock Market Mentor, not really sure why you don’t want to do that because it is, it’s a four-letter word, starts with an F but it ends with an E, it’s free. You get a free look for thirty-days, so why don’t you go ahead and do that. I promise you, you know what? I’ll get you; you’ll stick around as a member. So anyway, check that out, enough of my shameless plug. Members get to the Strategy Session; lot of our stuff is working pretty well, we’re going to go through it. Free Chart