14-02-2018

Dry Bulk FFA: Panamax Index In Bull Territory

Highlights:
The index is now on wave 3 of wave C corrective move and starting to look overextended.

The futures all remain in bull territory but in corrective phases. Based on Elliott wave analysis we are on leg 4 corrective waves.

This would suggest that market pullbacks should in theory hold between the 38.2% and 50% Fibonacci support levels.

If the highs of leg 1 are broken, then it would suggest that the bull cycle is over.

Supramax Index Daily

Source: Bloomberg

Resistance – 10,475, 10,592
Support – 9,339, 9,229, 9,066

The Supramax index remains corrective and is now on a leg C of an Elliott wave correction.

Fibonacci support is between USD 9,339 and USD 9229 with further support at USD 9,066. Technical resistance is at USD 10,475.

Wave C corrections tend to be 5 waves which would suggest that after a market pullback there should be one more down move in this sequence.

The weekly stochastic at 8 is now in oversold territory, not a buy signal it does add weight to the near-term support levels.

Upside moves need to trade above USD 10,475 to be considered bullish at this point until a lower high is produced.

Supramax March 18 Daily

Source: Bloomberg

Resistance – 11,195, 11,370
Support – 10,453, 10,170, 9,985,9,655

The March futures is now making lower lows and has entered in to a corrective phase.

The stochastic is now at 16 and in oversold territory. Technical support is between USD 10,453 and USD 9,985, with the 50 period MA at USD 10,510. Although corrective the march futures are not considered bearish at this point as they remain above the USD 9,985 support.

From an Elliott wave perspective this looks to be a leg 4 correction, suggesting another bullish impulse wave is due. Upside moves that close above USD 11,195 would be considered as technically bullish.

Supramax Q2 18 Daily

Source: Bloomberg

Resistance – 11,688, 11,745, 11,934
Support – 11,047, 10,849, 10,650

The stochastic is now crossing the 70 line having been in overbought territory, signaling that we are entering a corrective phase.

Like the March this looks like a leg 4 correction for the Q2 futures. Leg 4’s tend to correct between 38.2% to 50% of the current wave, though they can of course go lower. Fibonacci support is between USD 11,047 and USD 10.650.

Upside moves that trade above the USD 11,688 high would be considered as technically bullish implying the corrective phase was short.

Downside moves that trade below USD 10,565 would weaken the bull argument, as to be considered bullish we should not trade below the high of point 1.

Supramax Cal 19 Daily

Source: Bloomberg

Resistance – 10,883, 11,300, 11,500
Support – 10,444, 10,294, 10,144

Like the rest of the Supramax futures, the Cal 19 remains in bullish territory and above key moving averages. There is a mean reversion gap that has formed with the 50 period MA whilst the stochastic at 79 is in overbought territory. From a technical perspective this would suggest the futures are currently looking overextended.

Fibonacci support can be found between USD 10,444 and USD 10,144, with resistance starting at USD 10,883. The resistance is based off a market low in August 2014. Although briefly broken price action is now back below this level.

Technically the trend is bullish but looks over extended based on the mean reversion gap with the 50 period MA.

Source: Freight Investor Services (FIS)

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