The Index remains technically bullish and is now on week 6. Recent upward moves have tended to last 10 weeks or more.
Back to the rolling front month for a longerterm picture for the April futures. Our analysis suggest that Fibonacci levels still have relevance even though it’s a rolling contract.
The nature of the pullback was short, and this opens the possibility that we are currently on an extended wave 3.
The technical picture is firming on the Q3 18 futures, hover this has not yet been confirmed by price itself, and we remain in a corrective phase. The potential for an extended wave 3 remains, however it is still too early to tell.
The Cal 19 futures are in a corrective phase within a bullish trending environment with the stochastic now showing a bullish hidden divergence. A close above the USD 11,880 resistance would suggest the technical is once again in bullish territory.
Supramax Index Weekly
Resistance – 12,413, 13,137, 14,307
Support – 10,180, 9,651, 9,350
The Supramax index continues to push higher and remains in a bullish technical environment with the index now trading above the near-term resistance of USD 12,118.
The weekly stochastic remains in overbought territory which can be a warning that momentum has the potential to slow down. However, this can also represent a strong trending environment as seen in 2016 and late 2017.
We are currently on week 5 of this bull move which based on recent price action over the last 2 years remains a relatively short period and would suggest that longer term trend has potentially more to the upside.
Support and resistance remains unchanged. However, a close below USD 11,654 would indicate that bearish pressure is growing and could signal a corrective move within the current bull trend.
Supramax April 18 Rolling Front Month
Resistance – 13,090, 13,622, 13,920
Support – 12,398, 12,185, 11,971
The close above USD 12,870 has resulted in the April futures creating a higher high and a higher low; from a technical perspective this market should be regarded as bullish. Price action remains above both the 8 and 21 period EMA’s which also supports a bullish technical.
Last week we noted on the rolling front month contract that we had entered leg 4 after completion of wave 3. The nature of the pullback was short on the rolling contract and did not test the 38.2% retracement level. The short pullback opens the possibility that the pullback was leg 4 of leg 3 and we are looking at an extended wave 3. This would have longer term bullish connotations to the market as the current 5th wave would not signal cycle completion.
The stochastic is lagging price action and has the potential to create a bearish divergence. Not a sell signal it is a warning that upside momentum could be weakening, and another corrective phase could be due.
Downside moves that trade below USD 12,660 would create a fresh market low indicating another corrective phase. However, price action would remain above the 8 – 21 period EMA’s which would suggest corrective and not bearish at this point.
Supramax Q3 18 Daily
Resistance – 12,270, 12,320
Support – 11,800, 11,684, 10,298
Price action has held on the 21 period EMA with the stochastic producing a bullish hidden divergence keeping the technical in bullish territory. We also see a bullish flag pattern (much like the Panamax yesterday) adding weight to the technical picture. However, we have recently made a lower low in the market, and price now needs to close above USD 12,105 to be considered as bullish and in line with the rest of the technical.
Downside moves that close below USD 11,800 would keep the technical in a corrective phase.
However, with the 8 period EMA still above the 21 period EMA and both EMA’s remain above the 55 period MA, the move would have to be regarded as corrective and not bearish at this point.
We noted last week that the corrective wave 4 has the potential to be part of an extended wave 3 and this remains possible. However, we continue to remain corrective at this point below USD 12,105 so it remains a little early to tell.
The technical is leaning towards another upward move, however confirmation is still needed at this point.
Supramax Cal 19 Daily
Resistance – 11,880, 12,252, 12,523
Support – 11,605 10,830, 10,444
Little changed for a third week on the Cal 19 futures. Technically we have made a new low confirming that we are currently in a corrective phase. Price action remains above the 8 – 21 period EMA’s which remain in bullish territory. At this point the market should be regarded as corrective and not bearish from a technical perspective.
The stochastic is now showing a bullish hidden divergence. This is not a buy signal. But a warning that downside momentum could be slowing.
Upside moves that close above USD 11,880 would indicate that the technical picture is once again firming. Likewise, a close below the USD 11,605 support would suggest that we remain in a corrective phase, with the potential to test the 55 period MA at USD 11,181.
It is worth noting that the Moving averages have now started to flatten which indicate market consolidation, rather than a market in trend.
Source: Freight Investor Services (FIS)Previous Next