24-11-2017

Dry Bulk FFA: Panamax Still Bearish But Approaching Support Level

Panamax Index- Technically bearish but approaching a key support level after 11 consecutive down days suggesting we could find support soon.
• Dec – The technical is currently bearish. However a large mean reversion gap has formed with the 50 period MA suggesting the market is a little oversold.

• Q1 – the recent pullback looks bearish, however we have recently broken a key resistance and would be selling from a market high making this a high risk trade.

• Cal 18 – A bull trend that has started to correct on the back of a bearish divergence. Caution on a close below USD 10,040.

Panamax Index Weekly

Support – 10,022, 9,538, 8,765
Resistance – 13,265, 13,877, 16728

Stochastic at 0

The index is technically bearish based on it producing a lower low and lower high, and is now approaching a key technical support at USD 10,022.

The stochastic at zero represents a trending environment, however as we approach support we have now seen 11 straight corrective days, equal to that of the correction that started on the 19-9-17.

Market buyers will now need to see a higher low for buy entries as we are coming from a lower low. Upside moves that fail to close above USD 12,583 should attract technical sellers to the market looking for further downside continuation as this would suggest a bearish head and shoulders pattern is forming.

Technically bearish but approaching a key support at USD 10,022 after 11 down days suggesting a bounce is due.

Panamax Dec 17 Daily

Support – 10,995, 10,620
Resistance – 11,250, 12,520

Stochastic at 11

The Dec futures continue to remain in a bearish trending environment and has recently reverted back to the 8 period EMA.

The rejection of the average does suggest downside continuation in the near term, targeting recent market lows, and potentially lower.

Although technically bearish, price action is showing a large mean reversion gap with the 50 period MA and this would suggest caution at these levels, and indicate that the market is looking oversold. This becomes more relevant as the index is looking to test a key support level. Technically bearish, but looking a little oversold.

Panamax Q1 17 Daily

Support – 9,447, 9,090, 8,522
Resistance – 9,972, 10,313

Stochastic at 39

On paper the Q1 futures look to have produced a technical sell signal due to the pullback in price yesterday. However we recently broke a technical high that had formed at USD 9,783 on the 13-11-17.

Market shorts need to be cautious due to the recent close above USD 9,783, as this has increased the probability of a higher low forming in the market. The market is technically bullish at this point.

Downside moves that fail to close below the USD 9,447
support should attract technical buyers into the market on the basis the trend will have confirmed a bull bias in the near term.
A close below the USD 9,447 support would increase the probability of a higher low forming and market longs should look to tighten risk at this point.

Panamax Cal 18 Daily

Support – 10,040, 9,715, 9,465
Resistance – 10,517, 10,586, 10,655

Stochastic at 83

The Cal 18 futures are back in bullish territory having made fresh market highs, and will remain so above USD 10,040.

A recent bearish divergence with the stochastic appears to have been the trigger for yesterday’s sell off, and is potentially the start of a corrective wave within the bull trend.

Downside moves that hold above the USD 10,040 support would suggest upside continuation. Likewise, a close below the support would increase the probability of a lower high forming and should attract technical sellers to the market.

Source: Freight Investor Services (FIS)

 

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