Baltic Dry Shipping Indices: Technical Commentary, Week 2 / 2018

January 16, 2018

 

HANDYSIZE

 

A Happy New Year to everyone, and what a difference a festive season makes. While wishing you all the best for 2018, we look back wide-eyed on the last couple of weeks in 2017.

Noting that that our ideas of support in the 575 - 600 region proved out, nonetheless the Handysize Index took a significant wander downwards.

 Closing the second week of 2018 at 587, the MACD and RSI proved their cautionary signals of Week 49, 2017. Our ideas of working upwards to the 750 level duly evaporated. The MACD continued to signal bearishness by crossing its signal line, although the RSI is in neutral territory at 43.26. 
This suggests that the 575 - 600 support zone may hold, perhaps with a lower bottom end, say around 550.

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SUPRAMAX


As with the Handies, we were hoping for a little Supramax bullishness towards the end of 2017, but our cautionary 
tale
of a pullback from the tiny range on the Week 49 chart
came to pass.

The recent action in the Supras maintained our 875 - 900 support ideas, but recent dips to 845 (Week 42) and 884 (Week 1, 2018) have us wondering. Is resistance to an upside move building just above present levels? It may be worth keeping an eye on the 800 region for any weakness, should the small recovery of Week 2 show signs of fizzling.  

The MACD is still on the bearish side, although the RSI has slightly recovered into the neutral zone at 41.47.

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PANAMAX


In the Panamax Index, our suspicions of the index setting up for a drop were confirmed by subsequent action in Weeks 50 and 51. The small recovery in 2018/Week 1 was more or less wiped out by Week 2's range.

Amid growing weakness and volatility in the Panamax Index, the increasingly wider swings were seen to take a rest around the low end of our support ideas in the 1400s range. Breaking through into the 1300s, the Panamaxes may be taking aim for a test of the 1275 level should the recent weakness continue.

The MACD, after flirting with the bullish side, took a firm run in the bearish direction over the past month. However, the RSI stayed just on the high side of neutral, suggesting things might level off slightly.

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CAPESIZE

 

Immediately after our previous pontificating on a possible set-up for consolidation in the Capesize Index, (similar to the Panamax Index) you might have noticed that the Capes took a sudden excursion off into bearish territory.

Our previous thoughts of resistance around 4250 had a good test in Week 50's high of 4293, and fell from that point on. We thought it was possible that some support could have built around 3500 - 4000, but the Capes (being the Capes) put paid to that idea. 
It indeed appears that the RSI in the peakish mid-70s was cause for concern. As of Week 2/2018, the RSI had retreated to more neutral ground in the mid-40s.

The MACD had crossed to the bearish side by 2017 as the index fell, and saw the Capes close Week 2 at 2296. At this value, the Cape Index has firmly entered our lower support level. This isn't surprising for the Capes, since we've seen this before - i.e. their propensity for being ahead of any given chart at any given time. (Just an observation - no sour grapes whatsoever...) Given the Capes' volatility, should support around 2300 - 2400 fail to materialise, a weather eye on the 2000 level might not hurt.

 

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