Is Diana Shipping Headed for a Big Move?

NYSE: DSX | Diana Shipping inc. common stock News, Ratings, and Charts

DSX – A symmetrical triangle pattern has formed in the chart of Diana Shipping Inc. (DSX). This occurs when a down trending resistance is combined with an up-trending support line. The stock is expected to either break above its resistance or below its support. Read more to learn how to profit from this trading opportunity.

Diana Shipping Inc. (DSX) provides shipping transportation services. The company, through its subsidiaries, operates a fleet of vessels consisting of dry bulk carriers such as Panamax, Kamsarmax, Post-Panamax, Capesize and Newcastlemax vessels. Using this fleet, the firm provides transportation services for various goods including coal, iron ore, and grains.

As the global economy has continued to open up, the demand for shipping has sky-rocketed. This has benefited shipping stocks like DSX. This has been especially true due to high demand for steel in emerging markets and massive need for dry bulk shipping.

The company’s current ratio of 2.6 indicates that it has more than enough liquidity to handle short-term obligations. In terms of growth, analysts expect earnings to soar 240% next year. This has led to a Growth Grade of B in our POWR Ratings system.

The stock looks underpriced with a forward P/E of only 4.09. DSX has shown mixed performance over the past month as shown in the chart below.

Take a look at the 1-year chart of DSX below with my added notations:

Chart of DSX provided by TradingView

DSX is consolidating within a common chart pattern known as a symmetrical triangle. A down trending resistance combined with an up-trending support forms the triangle pattern (blue). Since there is no true way to know which way the stock will break, traders will often wait for the breakout or breakdown before entering a trade.

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A trader could enter a long position on a break above the down trending resistance with a protective stop set under the entry level. However, if the stock were to break below the trend line support, a short trade could be entered with a protective stop above the trend line.

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DSX shares were trading at $5.38 per share on Thursday morning, down $0.15 (-2.71%). Year-to-date, DSX has gained 178.76%, versus a 21.91% rise in the benchmark S&P 500 index during the same period.


About the Author: Christian Tharp


I am an expert stock market coach having helped over 4000 beginner and advanced traders & investors from around the world take control of their financial futures. I also write stock market related articles for the Adam Mesh Trading Group and Yolo Publishing. More...


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