[Beginning of Cramer's verbatim comments for this segment...]

Jim:          Hey, we can have more than one rolling bull market going on... at the same, why not? And, tonight, I want to highlight a second nascent bull... This time, it's in shipping, courtesy of a dramatic resurgence in global trade... This shipping sector, like the concomitant agricultural bull market we outlined earlier, just began to move a couple of weeks ago with the turn in day rates for all kinds of vessels... day rates being the key metrics to determine if the group should trade higher... how much it costs to rent a ship for a day. The companies that transfer solid goods... those are known as the dry bulk container companies... take commodities like coal, iron ore and grain, and dump them in huge ships... are on fire! They are sizzling... as we can gauge from last week's huge rise in the Baltic Dry Freight Index, which is continuing today... That is a fantastic measure of world trade. The index just keeps going higher and higher. It's very "Energizer bunny" like...

At the same time, the oil tanker stocks... a totally different class of shipping company, but in the same sector... have been on an amazing tear of late... something that's remarkable, given how poorly the business was performing just this summer. Whenever you see these two groups soaring, the market is trying to tell you that, like it or not, worldwide commerce is coming back. The bears will be wrong... the global recovery is for real.

And tonight, we're going "Off The Charts," because we've got to find a way to play this incredible shipping rally...

I want you in it, okay. When they were hot, wow, did we love them. When they were cold, we hated them... With the top dry bulk carrier and the top tanker company hardly moving, we're early and we've got to be ready... I say we pull the trigger...

I want to start by taking a looking at the technicals, because these two groups have been breaking out and, when that happens, it pays to consult the chartists to see if they think the stocks have more room to run, or if they're predicting a pullback.

Remember, we don't necessarily agree with the chart watchers, but we acknowledge that a whole lot of investors follow the charts, and we're not getting into this group without "chart protection," so this is something you need to be aware of.

What are the best shipping plays from a technical perspective?... The best dry bulk and the best tanker charts?...

We're going to our go-to guy, Dan Fitzpatrick. He's a colleague at RealMoney.com, the paid site of TheStreet.com, and he's saying it's Diana Shipping (DSX), the dry bulk shipper with the best chart. And yeah, old friend, Cramer-fave, Nordic American Tanker (NAT)... natty-dread, which I was dreading for a while, but I'm not anymore... is the best tanker play.

Fitz thinks both of these stocks are going higher, but they could pull back before that happens. More on that in a moment...

Alright, why don't we take a look first at Diana Shipping... Oh, look at that, it's a weekly chart... this is a weekly chart... You can see that this stock has been trading in a tight range... between $12 and $15... $12 and $15 since July. I told you you haven't missed anything yet. These two lines are called "Bollinger Bands"... We had some John Bollinger work on the show for an "Off The Charts" about a month ago. It's a technical tool that measures volatility. The narrower these two get, the less volatile the stock. Before Diana's recent breakout, these bands had gotten increasingly tighter. That's reflecting the lowest volatility this stock has ever seen... What does that mean? It means traders have become very passive... it means they couldn't care less about the stock... It means that it's the tail end of a bear market.

Fitz thinks that the latest breakout reflects a "volatility expansion"... his term... but that's where traders get more aggressive, and the price swings become more exaggerated. Even better, this is not chaotic volatility... the stock jumping up and down like that nonsense... uh uh, not an oscillator like it's a house or something... Fitzpatrick believes this volatility is "directional," and the direction is up, which means Diana's stock has the potential to explode...

On the other hand, when we look at the daily chart of Diana, Fitzpatrick... he grows more cautious... The stock is now 21% above its 50-day moving average, and has become what he calls "overbought"... This move has made it overbought. That means it's moved up too far, too fast, and could be due for a fall...

In Fitz's opinion, Diana could be a buy right here, but he wants it to come back... he wants it to pull back to $15, okay... that's his ideal price. And, you know what? He says, short-term, the darn stock isn't going to work... He thinks this stock is going to stall here, because it's just too hot... I get that...

Just tonight, a competitor, DryShips, Inc. (DRYS), is taking advantage of the strength that it's been experiencing... very similar to this... and it's selling a bond that's convertible into common stock... Do you know that stock is down 7% in post-market trading?... So, Fitz may be onto something short- and long-term.

How about the rest of the oil tanker plays?...

NAT... Herb Johhannsen... Fitz is more bullish about NAT... Nordic American was steadily trending downward ever since June... step by step, inch by inch, slowly, NAT fell... And, everytime it would rally up to its 50-day moving average, the stock got clobbered, annihilated... look at this...

The sell at the moving 50-day average had been flawless... right up until last week... I told you this was a nascent bull market... where we got a high-volume breakout. Remember, volume is like a polygraph for technicians... Lots of volume... right here, that's the volume... see it spike? Look at this... it's doing nothing... doldrums, doldrums... boom! That spike in volume is telling you... it says that move's truthful. And, now that Nordic American's 50-day moving average is now trading higher, Fitz thinks it will now define the bottom. This one's done going down!

Wow... given that this key moving average is at $29.50 right now, less than a dollar below the stock's current price, Fitz thinks this one's a great one to buy. He says little to no downside risk!

How about the fundamentals?... The technicals are strong. What do we think?...

Okay, for the dry bulk shippers, we had liked Diana until we interviewed the company's CEO, back on November 2nd of 2007. We were "all in" tankers... and he came on and told us that, listen, we were nuts... the rates were not sustainable... he nailed it. We told you to get out of these things nine ways to Sunday... At the moment, the dry bulk rate was at $111,000 a day. It declined to $10,000 a day in the 4th quarter of 2008. At the time, Diana was at $42.92. Do you know, that's about 150% above its current price? But now these rates are coming back... rising a remarkable 30% just last week alone... and they're not done going higher... which means, neither is Diana. The dry bulk shippers are plays on the resurgence of world trade, especially trade with China, as these companies haul the commodities that the Chinese communists can't get enough of...

Port congestion is on the rise in China, thanks to increased demand for seaborne coal and iron ore... the commodities that are needed to feed the rapidly-growing Chinese steel industry.

Diana Shipping... let's get that chart of Diana Shipping up here for a second... reported a stellar quarter last Tuesday, okay... It has a fleet of 21 ships as well as the pristine balance sheet that could allow it to acquire nine more. Why do I want to show this (chart) to you again? Because I don't want you to think you missed anything. We got you out right about here (as Jim points up to the ceiling, above the screen that's showing the chart), okay... and then we're getting back in right here (pointing to the bottom of the chart line)...

You can't beat that! That's important, because financing is tight in this business now, but Diana has the money to grow its fleet and, as dry bulk rates rise, the company could bring back its dividend, which was suspended after the 4th quarter of 2008, in order to build cash for potential acquisitions. The shipping stocks have historically been fabulous when it comes to dividends. It gets some gigantic yields when business is good. Diana will be no exception. It suspended the dividend it typically paid out of nearly all of its distributable cash flow, and it had it.

Okay, now as much as I like DSX and the dry bulk shipping plays, they cannot hold a candle - ooh, this is a candle chart - to Nordic American Tanker...

Rates for "Suez Max" tankers... I use that term to show you how smart I am... rose nearly 30% last week. And NAT operates a fleet of 14 Suez Max tankers. That means they can go through the Suez (Canal)... Demand for oil around the world is on the rise too... and we know that from soaring crude prices... but the main reason to go with the tanker stocks and NAT has to do with a decision that the Chinese government made last week, that no one was paying any attention to... except for followers of Chairman Mao and us... which is the decision to ban all single-hull oil tankers, effective January 1st. Nobody expected the People's Republic would actually care about the environment... and actually ban these ships... they surprise. Maybe they're kinder and gentler than we think. And soon, only double-hulled tankers will be able to do business there. That's good news for NAT. It's fleet is made up entirely of double-hulled ships.

I've championed natty-dread (i.e., NAT) before as a terrific dividend play, including in my book, Getting Back To Even... but, last week, the company drastically cut its payout... Well guess what happened?... The stock is up since then. That's a major show of strength. We have long been behind Nordic American Tanker because of its strong balance sheet and low costs, generous dividend policy... every dollar they make, they pay out... they don't have any debt to speak of.

As rates rise, and NAT's ships come online, its dividend is going to come back... it's going to roar back... Plus, NAT has much more exposure to spot rates than Diana... even though they're in different markets. What this means is that, if you believe in the resurgence of global trade, NAT gives you more potential upside than Diana, which has chartered out a greater proportion of its ships at rates that are locked in.

Here's the bottom line of the charts... the bottom line of the fundamentals...

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The Bottom Line!:     The shipping stocks... both of the dry bulk and tanker variety... are now en fuego!  Dan Fitzpatrick likes Diana Shipping (DSX) and Nordic American Tanker (NAT) as the best ways to play each industry, based on technicals.  I have hated this Diana!  I'm going positive for the first time with Diana...  I think he's dead right on that one...  And, NAT... I should have left it earlier.  I never did.  It's a raging buy.  DSX is more stable.  I think NAT has more upside.  And don't forget how attractive the dividends I'm expecting from these companies could be when you compare them to any other asset class.  Put simply, Diana and NAT were made for each other, and made for you.

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[end of segment]

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