In Dry Bulk Market,International Shipping News 03/04/2017
Technical range resistance is currently being respected on an overbought stochastic suggesting we could potentially enter into a corrective move soon.
The Longer term technical remains bullish.
• April – remains in bullish territory, there are signs of weakening momentum as price has breached the recent high support level.
• Cal 18 – Upside price action is now decreasing, however moving average support is being respected indicating the bull trend remains in tact
• Q2 v Cal 18 – Bullish above US$ 370. Showing signs of a weakening trend.
The technical resistance from last week’s report is currently holding with index pricing now retreating from the longer term resistance levels. Momentum remains over bought at 84, and volume is dropping (one week lag) implying that resistance levels should hold in the near term. Technically after 7 weeks of higher highs we are reaching a natural level of cyclical upward exhaustion for the Index. Technically the index remains in range with a bullish undertone. And this would be a natural area for a retracement. However we retain a longer term bull bias on the index based off the March 2016 March 2017 technical formation which produced 5 waves up and 3 waves down a complete Elliot wave cycle. We have now surpassed last year’s cycle high on the first upward wave, suggesting a new bull cycle is in play.
Support levels held last week and fresh highs were once again achieved. The technical trend remains bullish above US$ 14,820. Below this level we will be making fresh lows and would suggest the bull trend is in transition. It is worth noting we are trading below the US$ 17,300 high from the 16-3-17. This is the first swing high break sine the technical breakout on the 20-2-17 and would suggest that momentum is starting to weaken. Technical support can be found at US$ 15,597, and 15,470, a close below this area would suggest that the key US$ 14,820 level should come under pressure. Conversely a rejection of the support zone would suggest a further upward swing.
Technically bullish, the upside moves in the Cape Cal 18 futures are becoming smaller and smaller, an indication that upside momentum is weakening. A close below the recent low of US$ 13,470 would suggest the bull trend could be entering into either consolidation or a transition from bull to bear, making it a key support level. If support holds then the logical upside target is the recent high at US$ 13,970, with further resistance at US$ 14,077 and US$ 14,350. The bull trend has been showing signs of weakness for the last two weeks. However it is still bullish and moving averages are still being respected, technical sellers should be cautious of entering until new lows are confirmed, weakening we maybe, but with higher highs and higher lows this is not yet a sell.
Like the rest of the cape complex the Q2 V Cal 18 futures spread remains in bullish territory as it continues to make higher highs and higher lows. The recent pullback in the spread is below the high of the US$ 1,559 on the 16-3-17. This is the first support breach since the bullish breakout in February and would suggest momentum is weakening. However above US$ 370 we remain in bullish territory and until this is broken sellers should remain out of the market. If fresh lows are archived then the technical play should be coming from the sell side. Market longs should be looking for bullish momentum plays above the US$ 370.
Source: Freight Investor Services (FIS)
