Baltic Dry indices - Week 36 technical commentary

September 11, 2017

HANDYSIZE:

As we watch the Baltic Handysize index tentatively poke its way through the 500 level, we can't help thinking optimistically. There now appears to be some solid support at the 465 level.
We previously mentioned the 490 - 525 zone, and this might be in reach. Week 37 may bear this theory out.

The RSI still shows some robustness, with no peaking tendencies as yet.  The MACD has made a somewhat positive crossing into bullish territory, confirming our weak but positive trending seen in Week 35.

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SUPRAMAX:

The surge in the Supra index continues, having cleared the upper end of our 800 - 850 target area a little. Ending the week at 888, a new target of 925 may be a possibility. This would be mimicking the late 2016 and early 2017 peaks.

 We'll see if some consolidation kicks in around 850 - 925, or if this late-season boost has some steam left. 

If this was a public company we were talking about, the RSI would be approaching a peakish "overbought" at the present 76.49.
The still bullish MACD is considered a lagging indicator, so let's observe, but not place too much stock in it at this point.

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PANAMAX:

The plodding Panamax index continued its measured progress upwards, checking itself and moving on again as it tested its footing. We mentioned some possible weakness in our Week 35 comments, and generally the index has been slow to gather upside momentum.

Overall though, that 1100 level continues to show resilience. If some consistency shows up above 1200, it's possible the
index may see some more positive progress. The activity of the past few months may indicate a more staid approach, however.

The MACD is still cautiously bullish, but with the RSI higher at 71.97 the Panamaxes' slow climb may be somewhat tempered as the late 2016/Spring 2017 peaks are approached.

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CAPESIZE:

Our mild gloominess about the Cape index for Week 35 could be mistaken for entrenched pessimism. As we cautioned though,the Capes certainly have a corner on volatility, don't they? Week 36's close at 2767 puts the index squarely in the zone of late 2016/early 2017's peaks and in sight of 2014 highs.

We can try to look for cause and effect combinations - China's iron ore imports, the climb in steel prices, the volume surge in Dalian Iron Ore futures over the past few weeks.

As can be noted from recent peaks in the Cape index though, the RSI doesn't often get close to 80 as with other indices. The area around 70 has been the tipping point of 2017's retreats, and we are at 69.29. As with the Panamaxes, the MACD is bullish but not trustworthy at this point, and we're still watching the 1500 - 1700 region for possible pullback. Further upside movement would depend heavily on support building, but for now the Cape index in the 2700s seems a very precarious perch.

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