In Dry Bulk Market, International Shipping News 20/03/2018
Highlights:
The Capesize index has broken its range support and is now bearish rather than bearish to neutral. Upside moves need to trade above USD 12,609 to create a fresh market high and signal the technical could be firming.
The Capesize index has broken its range support and is now bearish rather than bearish to neutral. Upside moves need to trade above USD 12,609 to create a fresh market high and signal the technical could be firming.
The Wave overlap was a concern last week and this has proved to be founded. The rolling front month technical would suggest that we are on a leg C corrective phase.
The Q3 futures are corrective. The 5 waves down on the daily chart would imply Leg A could soon be over and an upward move via leg B could soon begin.
The Cal 19 futures remain the strongest of the technical. Currently in a corrective phase, wave analysis on the daily chart would suggest an extended wave 3, implying a less aggressive correction compared to the shorter dated futures.
Capesize Index Daily
Source: Bloomberg
Resistance – 12,609, 13,569, 14,106
Support – 6,950, 4,675, 2,399
Support – 6,950, 4,675, 2,399
The downside breakout below the range support has resulted in further downside moves for the Capesize index; Neutral to bearish is once again a bearish.
Both the weekly and daily stochastics are in oversold territory, not a sell signal it does warn that momentum has the potential to slow down. However, in trending environments the stochastic is often at its extremes.
Fibonacci support is at USD 6,950 and USD 4,675 with resistance at USD 12,609. Upside moves that trade above this level would create a higher high and suggest the technical picture is starting to strengthen. Preferably with price action above both the 8 and 21 period EMA’s.
Upside moves that fail to trade above the USD 12,609 resistance would be considered as bearish unless a lower high has formed and been broken.
Capesize April 18 Weekly 1 Month Rolling
Source: Bloomberg
Resistance – 16,898 17,370, 17,842
Support – 12,713, 10,275, 7,258
Support – 12,713, 10,275, 7,258
Last week we highlighted the wave overlap below the peak of wave 1 in the April futures. This suggested a 3-wave correction of a greater degree, and this has been the case.
The chart above is the rolling front month weekly contract as we need to see a larger technical picture. Here we can see on a longer-term time frame that the rolling contract has completed a 5-wave sequence and is now on wave C of its corrective phase.
Weekly Fibonacci support is at USD 12,173 and USD 10,275. With upside resistance at USD 17,920. A close above the weekly high at USD 17,920 would imply the corrective phase was over and we could be entering a wave 3 of Elliott to one higher degree.
Market pullbacks that hold above the USD 10,275 support would increase the probability of another bullish cycle. However, the weekly chart would need to trade above USD 17,920 to confirm this.
Capesize Q3 18 Daily
Source: Bloomberg
Resistance – 18,468, 18,780, 19,091
Support – 17,295, 16,633, 16,275
Support – 17,295, 16,633, 16,275
Last weeks bullish divergence failed with the stochastic going on to make new lows, with the death cross between the 8 – 21 EMA’s being the dominant indicator. The 5-wave sequence down would suggest we have entered a longer-term corrective phase, and currently remain on wave A.
Technical support is at USD 17,295 and USD 16,633 with resistance between USD 18,468 and USD 19,091.
5 waves down would suggest we could soon enter a wave B corrective phase. These tend to retrace 0.618% (USD 19,091). Upside moves that fail between the USD 18,780 – USD 19,091 Fibonacci resistance zone would suggest that we could be completing leg B.
Technically the market is in a corrective phase. However, the 5 waves down on the daily chart would suggest we could soon be completing leg A, the first of two bearish impulse waves and entering a Leg B corrective (up) wave.
Capesize Cal 19 Daily
Source: Bloomberg
Resistance – 17,670, 17,830, 18,370
Support – 16,920, 16,590, 16,350
Support – 16,920, 16,590, 16,350
The Cal 19 futures is now in a corrective phase along with the rest of the Capsize complex as it is making lower highs and lower lows.
Near term technical support is at USD 16,920 with further support down to USD 16,350.
However, if this is a longer-term corrective phase then the weekly 38.2% Fibonacci support at USD 15,725 could be a potential target.
Technical resistance is at USD 17,670 and USD 17,830. A close above the latter resistance would have bullish implications going forward as it would create a fresh high, implying the corrective phase is over.
The Cal 19 remains the strongest of the technical at this point. It is currently corrective within a wave 3 on the weekly chart. However, Elliott Wave Analysis on the daily would suggest that this could be an extended wave 3 meaning the correction could be less aggressive that the Q3 and April futures as it looks like we may not yet have seen a wave 3 completion.
Source: Freight Investor Services (FIS)