30-06-2017

Dry Bulk FFA: Panamax Upside Momentum Slowing Down

panamax

Panamax Index Weekly

Resistance – 9,803, 11,065, 12,987

Support – 8,312, 7,279, 6,281

Technical resistance was broken last week as the bullish bounce of support levels continue.

Resistance is now at USD 9,803 and 11,065. Failure to close above these levels would suggest that upside momentum is slowing. Bearish weekly candles would suggest a potential corrective move lower, targeting the USD 8,312 support.

Although we have not seen a higher low on either the weekly or the daily charts. The strength of the move (45.5%) and the fact we are back above both the 50 and 200 period MA’s would suggest that any market pullback from here is likely to find buying support ,and the probability of a fresh low on the index is decreasing.

The technical is starting to strengthen, however 14 straight up days on the Index, on slowing momentum would suggest a near term pullback could soon be upon us. Market buyers should look for a technical bounce for fresh entries.

Panamax Q3 17 Daily

Resistance – 9,272, 9,685, 11,144

Support –9,060, 8,932, 8,563, 8,068,

The inverse head and shoulder pattern produced a technical breakout, resulting in upside price continuation in the region of USD 800.

The stochastic is starting to show a bearish cross, not a sell signal it does suggest that momentum is slowing and the neckline support at USD 9,060 should be tested.

Technically a close below the neckline support would imply that the H&S pattern has failed, however we target USD 8,563 as the key support, as this was the recent low. A close below this level should have market sellers looking for a lower high and potential sell opportunities in the market.

Market buyers are currently with trend, any corrective move that hold above the USD 9,060 – USD 8,563 support zone should attract fresh buyers.

Panamax Cal 18 Daily

Resistance – 8,923, 9,270, 9,475

Support – 8,560, 8,340, 8,000

The Panamax Cal 18 futures initially broke out above the H&S neckline, but subsequently failed to hold above the technical resistance at USD 8,923. Last week we noted the risks on this trade due to the overbought stochastic, and it is proving to be the case.

Back below the neckline, the futures remain in bullish territory above the USD 8,560 support. A close below this level would neutralise the bull move and have technical sellers looking for a potential lower high to form.

Market buyers looking for fresh entry should look for a technical bounce above the support level mentioned. Price action is the lead indicator, however we highlight the overbought stochastic and the potential for the Cal 18 to enter either a consolidation or corrective phase in the near term.

Technically bullish, market longs should keep risk tight due to the stochastic.

Panamax Q3 V Cal 18 Daily

Resistance – 787, 840, 1,365

Support – 342, 224, 3

As highlighted last week, a neckline breakout on the H&S pattern would override the overbought stochastic, and this has proven to be the case. This however does not mean we can ignore the stochastic as it continues to highlight the need for the spread to pull back.

The H&S neckline is the most logical area of support at USD
342. A technical bounce at this level would again override the stochastic and suggest upside continuation, targeting the USD 787 high. However, market long should remain on alert for a potential upside failure due to the placing of the stochastic.

Market sellers need to see a lower high at this point due to the bullish nature of the trend. A close below USD 3 would increase the probability of a lower high.

Full Report

Source: FIS

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