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One of the best-run shipping companies is looking incredibly bullish

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May 16, 2013 – Comments (4) | RELATED TICKERS: DSX

Yes, here is another blogger claiming that it's time to jump into DSX.  Cool story, Hansel.  Right?  Well, whatever.

It looks like Diana Shipping (DSX) is just finishing the mother of all cup and handle patterns.  It is one of the prettiest looking charts I think I've ever seen.  There was strong weekly volume in early 2012 during the run up to the beginning of the cup formation.  There was medium to light volume throughout the entire, year-long cup formation.  Big volume spikes finished up the cup formation, and a near-perfect handle formation is occurring, correcting only in the top half of the cup pattern.  This is the 7th week of the handle formation, and today's big volume paired with a weekly close near 11 could signal a breakout.  (you know, all that Bill O'Neil "How to Make Money in Stocks" stuff)

If you look at shippers' charts across the board, it finally looks like the shipping bottom has come and gone.  This could be the nascent stages of a long, long bull market in shippers.

DSX has more cash than debt, which I'm not sure any other shipping company can claim. They have plenty more ammo for ship acquisitions.  Even after it's run past $10/share, it's still trading well below book value.  This is one of the best-run shipping companies.  If the shipping sector turnaround is finally here, I think that DSX management can take advantage of it.  

The next two weeks could be a big tell tale sign for DSX.  I currently have DSX green-thumbed, but I don't have a RL position.  It's tough not to jump in right now, though...

4 Comments – Post Your Own

#1) On May 16, 2013 at 4:36 PM, Teacherman1 (57.98) wrote:

It is the best in class,ElCid, and will remains so.

Even though it does not show on my CAPS page, I am in at $7.35, unfortunately, I don't have much.

I was in under $7.00, but sold out just before the Sequestration because I wanted some cash, but bought back in when the world didn't come to an end.

I also have NM, at $3.48, which is in my opinion, the 2nd best in class, but again, I did the same thing with them and don't have much at this time.

I think that in time ( probably not to long from now), DSX will put their dividend back in place and then it will run up even more.

I don't know what the "cup or handle" formations are (I assume they are technical indicators), but if you are looking for a longer term hold, they would both be good investments.

JMO and worth exactly what I am charging for it.

Good luck whatever you choose to do.

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#2) On May 16, 2013 at 6:47 PM, blesto (32.05) wrote:

I don't know about any Cups-n-Handles but the last time DSX traded this long above their 200 day moving avg, they continued to rise nicely over a year until the crash in '08.

Also I get a Graham Number Valuation of $15.24 

Teacherman1, I'm also long on NM. I just keep adding a little here and little there and so far have refused to sell.  I like my current Graham Number Valuation Range for NM of $16.39 to $19.71

Speaking of 1971, that was a very good year for me. :-)

Foolish Best

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#3) On August 26, 2013 at 11:09 AM, ElCid16 (93.74) wrote:

It looks like the breakout on DSX is underway, now.  It'll be interesting to see how far and how long this one runs from here.

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#4) On September 07, 2013 at 11:25 AM, ElCid16 (93.74) wrote:

Another breakout confirmation on DSX this week.  7MM shares traded last week; average weekly volume is around 4.2MM.  The stock finished the week at 12.83, well above the resistance at 11.

We could be looking at a 1,2,3- year bull market in the shipping industry.  This stock could have major room to run. 

I'm not normally a technicals guy, but this has been a fun stock to track over the past 6 months.

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