Panamax Market Looks Like It Could Enter A Corrective Phase


Panamax Index Weekly

Resistance – 12,478, 14,773, 16,728
Support – 12,172, 9,403, 7,968
Technically the trend remains bullish with continued higher highs and higher lows resulting in a break in upside resistance levels last week. However, Panamax rates in the index this week have been negative, and we are seeing pricing back below the US$ 12,478 resistance level.

Failure to hold above the US$ 12,478 level would suggest we are about to enter into another corrective phase, as this is a natural point of resistance. The stochastic at 96 is now looking overbought and would support the US$ 12,478 resistance level. Technically a bullish trend, we are now starting to look overbought at resistance levels, the likelihood of entering a corrective phase is increasing based on the momentum and bearish rejection candle.


Panamax May 17 Daily

Support – 9,660, 9,630, 8,756
Resistance– 11,120, 11,740, 13,063
The recent sell off in the May futures has resulted in the bull trend entering into a corrective phase with the futures now trading below the US$ 11,120 support, and shorter period moving averages. Resistance can be found between US$ 11,120 and US$ 11,740. Any upward move that stalls in this resistance zone should attract technical sellers into the market, as this represents previous support levels and the 20 period average line. The stochastic is at 34, although not oversold it should enter into bear territory soon as we approach near term support at US$ 9,660. Price rejection here could a technical bounce up to the resistance levels mentioned.


Panamax Cal 18

Daily Support – 8,962, 7,970, 7,514
Resistance – 9,486, 9,574, 9,900 The technical breakout came to the upside and stalled below the US$ 10,000 level with a move of only 4.5%. The Cal 18 futures are now correcting and back into the previous range from two weeks ago with technical support at US$ 8,962 and resistance at US$ 9,486.

There have been a couple of changes in the technical that cannot be ignored. Price action is now below the 34 period EMA for the first time since October suggesting the technical picture is weakening, significantly the Cal 18 futures have made a lower low for the first time during the same period.

Upside moves that fail to make new highs should attract technical sellers into the market looking to test downside weakness. Momentum at 34 is nearing oversold levels and would suggest technical support levels could hold in the near term. However market buyers should look for a higher low sequence before considering long positions at this point.


Panamax Q2 V Cal 18 Daily

Support – 1,489, 1,158, 673
Resistance- 1,939, 2,730
The Q2 v Cal 18 looked bullish and we maintained our view on this in the previous report with a technical buy level on a close above US$ 1,932. This resulted in prices moving up to a high of US$ 2,727. The spread is now trading at US$ 1,487 and has made a lower low for the first time since December, however this is still marginal and leaves the spread in a support zone as the stochastic enters oversold territory. Any close lower than the current US$ 1,487 would suggest a directional change in trend and technical sellers should be looking for price rejection around the US$ 1,900 level. If prices hold at these levels there is still potential to test the upside once again.


Source: Freight Investor Services (FIS)

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