17-05-2018

Dry Bulk FFA: Panamax Index Looking Bearish

The Panamax index is now on the lower range support and at major Fibonacci level. Technically bearish the index needs to see a close above USD 10,261 for the trend to be considered as turning. however, and early signal would come from a close above USD 10,089 as this would be a 3-day high.

The June futures remain technically bearish and are now testing the recent lows within a range, which is putting a neutral bias on the bearish trend. The stochastic is showing a bullish divergence indicating downside momentum could be slowing. However, this needs to be confirmed by bullish price action and is not a buy signal on its own.

Upside price action in the Q3 futures is bullish but has stalled at the 55 period MA with the stochastic at 88. The futures are now between the 21 period EMA and 55 period MA indicating the technical currently remains neutral.

The Cal 19 futures is showing bullish price action but finding resistance at the 55 period MA with an overbought stochastic. Downside moves below USD 11,577 would be regarded as deep and suggest the next impulse move could be weak.

Panamax Index Daily

Resistance – 10,261, 10,914, 11,234
Support – 9,856, 9,590, 8,721

The Panamax remains technically bearish and is now approaching the long-term support zone mentioned in last weeks report. It is worth noting the yesterdays close at USD 9,994 was pretty much on the 50% Fibonacci retracement (USD 10,010) from the rally that started on the 7-6-17.

Price action remains bearish below all key moving averages however as we approach key range and Fibonacci support levels it is worth noting that the downward slope of the price action in the recent move is becoming less aggressive. With momentum indicators oversold and flatlining, this is probably the best visual on momentum to follow at this point.

Upside moves that close above the USD 10,261 resistance would create a fresh market high indicating that the trend bias could be changing back to bullish. Likewise, price action above USD 10,089 could be an early signal of change as this would be the highest close in the last 3 days. Ultimately the trend should be considered as bearish until a higher high is made.

Panamax June 18 daily

Resistance – 11,720, 12,100, 12,715
Support – 11,440, 11,319, 10,815

Technically the June futures remain in bearish territory below the 8 and 21 period EMA’s and continues to test the market low, However, price action in the last 2 weeks has become rangebound creating sideways action. Technically this market is now bearish to neutral due to the sideways action.

The stochastic is telling a different story and is showing a bullish divergence. Not a buy signal this does warn that momentum is no longer with the trend and could be an early warning that we could be seeing trend exhaustion. This needs to be confirmed with higher market highs as the indicator itself is prone to giving false signals.

Downside moves that close below the USD 11,440 support would signal a range breakout with further support at USD 11,319 and USD 10,815. Upside moves that close above USD 11,720 would indicate that the technical picture is turning bullish, however the shorter period EMA’s would still be regarded as bearish at this point.

Panamax Q3 18 Daily

Resistance –12,735, 12,890, 13,105
Support –12,133, 11,950, 11,385

As highlighted on the last technical the Q3 futures have gone on to make a higher high but stalled at the 55 period MA.

The Q3 has now produced a higher high and higher low indicating the technical picture is firming and this is supported by the 8 period EMA crossing the 21 period EMA. However, both these averages and price remain below the longer period MA with the stochastic at 88 and in overbought territory. This would indicate we have the potential for some form of price pullback in the near term. Technically we need to see more upside price action for the market to be considered as bullish.

Downside moves that hold above USD 12,133 would support a bullish technical play, but below this level would be considered as bearish with support at the lower end of last week’s range at USD 11,950 and then USD 11,385.

Bullish price action is countered by an overbought stochastic and the 55 period MA, with price action between both sets of averages indicating that this technical remains technically neutral in terms of price.

Panamax Cal 19 Daily

Resistance –11,815, 11,911, 12,235
Support – 11,4,44, 11,328, 10,863

Small upside price action has put the Cal 19 futures between the 8 – 21 period EMA’s and the 55 period MA, with the stochastic at 98 and in overbought territory. In terms of price action, it has effectively found fair value between the mean averages.

With the market finding resistance at the 55 period MA and the stochastic at 88, the Cal 19 futures has the potential for a pullback in price. Downside moves that hold above the USD 11,444 would be considered as technically bullish due to a higher market low. However, below USD 11,577 the pullback would be considered as deep and suggest that upside moves could be weak (more neutral) as bullish impulse waves tend not to terrace more the 61.8%.

Downside moves that trade below the USD 11,444 support would create a fresh market low and be considered as technically bearish with support at USD 11,328 and USD 10,863.

Source: FIS

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