Baltic Dry indices, Week 38 technical commentary

September 25, 2017

 

 Well look at that; in maritime media we see the trumpeting of 3-year highs in the Baltic Dry Index, even mentions of a "structural"
revival in dry bulk shipping fortunes. Glancing at our four indices that make up the overall Baltic Index gives the impression that things
are indeed rosy. Should we pick up our trumpet, shine up our buttons and join the parade?  Since we're studying numbers that
aren't directly traded, but a collation of carefully vetted estimates and submissions, traditional technical chart formations don't always apply in the Baltics' case. Let's have a look-see, though....

 

HANDYSIZE:

The slowly narrowing range seen in the Handysize Index since late 2016 has expanded at the upper end to late-2016 highs. Seeing the index knocking on the 600 level's door at 596, our upside target is now around the 635-650 range. As usual we're watching the rather large space between that target and the overall average in the 500 region, seen since late 2016.

There's plenty room for a re-tracement and/or pullback in that space. What we'd like to see, as we keep repeating, is some form of consolidation - targeted a little higher now at the 520 - 540 area. 

 The RSI at 85.15 is threatening to break into the 90s, which was late 2016's chart peak. The MACD is now well over on the bullish side, the start of which we commented on back in Week 35. Consolidation please handies, we're begging you.

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SUPRAMAX:

 

The Supramax Index up-surge thumbed its nose at our last target area of 1000 - 1050 with ease and closed the week at 1061. As with the Handysize index, this leaves a sizable range in which to re-trace.

Consolidation is something we don't see enough of, and again a cycle of foundation-building would definitely be welcome. Even with the heights reached in Week 38, the 850 - 880 area remains our hope for 
such a base.

The RSI at 85.29 is now around the peakish level seen at the end of 2016. The MACD again shows bullish, but at this stage is in lagging mode - this chicken shouldn't be counted.

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PANAMAX:

 

The Panamax Index is doing things that we wish would carry over to the other indices. The down-step seen in Week 38 may run true-to-form and form a base for the next step up. As mentioned in our Week 37 comments, we were hoping for support above 1200, and we may well see it in the 1250 zone.

The RSI has pulled back a little from possible peakiness at 69.9, down from the previous week's 74.38. The MACD could be seen as building consolidation too as it continues on the bullish side, just ahead of its signal line.

 The Panamaxes appear as turtles compared to the hares in the other Baltic indices, but as shipping goes is this index building some (gasp...!) confidence?

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CAPESIZE:

 

The Capes, the Capes; the streakers of the Baltic Dry Index? The interesting thing we've seen in the last few weeks though, is
the chart motion similar to the Panamax index. Even as the Cape index surges upwards, there have been a couple of consolidating
rests as seen on the candlestick chart. But, keep thy jaundiced eyes sharp; it's the Cape Index. At last week's close of 3147, the idea of an upside target over 3500 might be within the realm of possibility - dare we push 4000?

 However, our RSI at 75.01 hasn't been this high for the last year or more - a caution sign. The MACD is in lagging territory, and similar to some other indices, it shouldn't be relied on at this point. Should the Cape index follow the example of its Panamax cousins and take some firm consolidating steps, a peak and pull-back might be avoided. Maybe...just maybe.... there is some structural recovery in dry bulk after all - then again, the bulk carrier order book just hit 110 newbuilds since July. Did I just say that out loud?

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