Dry Bulk FFA: Supramax Index Testing technical resistance within a bullish trend


Supramax Index Weekly

Support 9,777, 9,081 8,486

Resistance – 10,198, 10,340, 11,016

The convergence between the price and the mean after sideways action has resulted in upside continuation with no test on the technical support levels. The index is now testing the Dec 2016 resistance at USD 10,198.

A close above this level would suggest upside continuation and resistance should then act as support. Price rejection from the resistance would suggest another corrective wave has begun. However the bullish trend would suggest this is a corrective wave and market sellers should look for a lower high to form on the daily chart before entering.

Market longs should be cautious of a close on the daily chart below USD 9,777 as this will neutralise the bull trend and increase the probability of a lower high forming.

Supramax Oct 17 Daily

Support – 11,075, 9,870, 9,375

Resistance- 11,927, 12,455, 12,982

Last week completed its reversion back to the 8 period mean and resulted in another strong upward move. Technically the trend remains bullish, however there is a small bearish divergence forming on the stochastic that suggests that upside momentum is once again slowing. Market sellers still need to see a lower high for anything other than short term sell opportunities.

A close below USD 11,075 would neutralise the bull trend and increase the probability of a lower high being created. Market pullbacks that hold above the USD 11,075 would be considered as technically bullish and should attract technical buyers targeting the recent highs.

Supramax Q4 Daily

Support –10,715, 10,060, 9,828

Resistance – 11,790, 12,177, 12,417

Sideways action resulted in a reversion back to the mean, and another upward move that has traded above near term technical resistance levels. The trend remains technically bullish above USD 10,715.

A close below this level would neutralise the bull trend and alert technical sellers to a potential lower high forming. Market pullbacks that hold above the USD 10,715 support remain in bullish territory and could attract a fresh wave of technical buying to the market.

The 8 period EMA has been well respected within this current move, and should offer some support around the USD 10,934 level. A close below the 8 period mean could be an early warning that the trend conditions are starting to weaken. Note, market buyers should be cautious of the mean reversion gap forming as it would suggest that price action is looking a little over extended.

Supramax Cal 18 Daily

Support – 9,516, 9,395, 9,185

Resistance- 9,610, 10,567, 10,825 A small technical pullback last week has resulted in a new high close in the Cal 18 futures. Although technically bullish, the stochastic is now showing a bearish divergence and market longs should act with caution.

Bullish above USD 9,516, market pullbacks that hold above this level could see another wave of technical buyers entering the market. Market sellers should look for a lower high to form before entering from the sell side due to the bullish nature of the trend.

A close below the USD 9,516 level would turn the trend bias from bullish to neutral

Full Report

Source: FIS

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