Knightsbridge Tanker (VLCCF)

[Wildbilly]

Knightsbridge Tankers Limited: 34% Upside, Minimal Downside

Tankers, Limited (VLCCF), Includes: SEA
Disclosure: The author has no positions in any stocks mentioned, but may initiate a long position in VLCCF over the next 72 hours. (More...)
Summary

With a risk to reward ratio of 1:9.5, now may be a good time to trade Knightsbridge Tankers Limited (VLCCF).
Knightsbridge Tankers Limited looks to be offering a 34% upside with very minimal downside risk (3.57%).
Analyst target of $15.80 for Knightsbridge Tankers Limited, which is currently trading just above $11.00.
Knightsbridge Tankers Limited (NASDAQ:VLCCF) is at a very opportunistic crossroad at present. After a recent tumble from its $16.00 high in early June, the stock appears to be settling near multiple significant support levels:

Horizontal price support at the $11.00 level:

The stock has previously used the $11.00 price level as a point of both significant support and resistance. As shown on both daily and weekly charts below, most recently, the stock broke out above this prior resistance level in early March and has since used this level as strong support (in mid to late April). It is worth noting also, on its weekly chart that the stock used the $11.00 level as support in late 2012 and eventually fell below this level in April, 2013; only to break back above the level in March, 2014, as mentioned above.

200-day simple moving average support at $11.09:

The stock broke below its 50-day SMA (simple moving average) last October, only to then test its 200-day SMA about a month later. As seen in the daily chart below, the stock used its 200-day SMA as support, pivoting from the level in December and beginning a new uptrend. A similar pattern can be seen currently, with the stock trading just above its 200-day SMA.

R1 support (yearly) at $10.92:

As most technical traders know, pivot point support and resistance levels can be very useful when attempting to predict a change in a stock's direction. Without going into a full explanation of pivot point levels and their uses, it should be noted that, on its weekly chart, Knightsbridge Tankers Limited is trading just above its yearly R1 resistance/support level. As you can see, the stock tends to use its pivot point support and resistance levels as areas of strong support or resistance. As such, and as mentioned, it is worth noting this third level of support along with the other two mentioned above.

more: http://seekingalpha.com/article/2376175-knightsbridge-tankers-limited-34-percent-upside-minimal-downside