DryShips Inc. (NASDAQ:DRYS) gained 8.06% during yesterday’s session, going up from its prior closing price of $3.10 to $3.35, and has now recorded rally in 6 consecutive sessions. It is uncommon for a stock to keep rising for so many consecutive days so a temporary pullback is likely. The stock price went upward in 7 of the last 10 days and has generated 210.19% during the last two weeks. Trading activity decreased by -29.10 million shares, and in total, 23.40 M shares exchanged hands for about $78.40 million. It should be noted that increasing price and decreasing volume show lack of interest and this is a warning that something has fundamentally changed.
Inside DRYS’s Recent Trend
DryShips Inc. (DRYS) lies the upper part of a very wide and falling trend in the short term, and this will normally pose a very good selling opportunity for the short-term trader as reaction back towards the lower part of the trend can be expected. A break down through the support point at $4.80 will initially suggest a lower tendency for declines in the price and this might very well be an early sign that a trend shift is coming. Short-term traders are anticipated to see a retreat of -84.57% over the course of a quarter and, with 90% chance the price will be floating in the range of $-1.46 and $0.74 in this timeframe.
DryShips Inc. Technical Signals
DRYS is a buy based on short-term MA; at the same time, however, a sales signal from the long-term average. Since the longterm average is above the short-term average there is a general sales signal in the stock. On additional rally, the share price will meet long term resistance at around $5.11. On a drop, the stock is likely to find some support over the short run, which begins at $2.05. A buy signal will be generated if it crosses above the long term moving average. Meanwhile, a price down versus the short-term MA will be a fresh sales call.
DryShips Inc. (NASDAQ:DRYS) Support And Resistance Levels
In case of pullback, the next support the price will capture from accumulated volume will not be far away from current price at $3.10 and $3.01. In case of gains, the next resistance from accumulated volume will not be far away from today’s level at $3.51.
It seems to be cursed by the accumulated volume as it meets no support below current level and favorable trading conditions around $ will drag the stock lower. Accumulated volume is going to prevent the price from rising further at $3.51 and this action will lead the price to take a temporary pause or stay muted for a few days.
DryShips Inc. (DRYS) Risk Assessment
A volatility based measure Bollinger Bands suggests this stock poses high risk. In the most recent session, the stock price hovered around $0.77 between high and low, or 27.02%. The average volatility for the past week stood at 32.67%.
The stock is in overbought condition based on RSI(14) readings and sits at the top end of the trend. In general, this will advocate a great exit point for short term investors, but in some cases it takes more time for the trend to shift while the stock is being overbought and the Relative Strength Index keeps going higher. Regardless, the high RSI together with the trendposition increases the risk and higher daily movements (volatility) should be expected. The stock correction is due. The decline may accelerate to the downside in the near term but it is reasonable to consider what the key support levels may be that would support a bounce back to the upside for stock. Since the DryShips Inc. has been rising for 6 straight session, the volatility is more likely to increase in the next couple of days. As it is hard to guess the reaction rate, investors should be cautious.