Baltic Dry indices: Week 40 technical commentary

Photo: M. Carlson

HANDYSIZE:
Golden Week gave rise to some interesting formations in the Baltic Index charts for Week 40. The Handysize index took something of a rest, as can be seen on the candlestick chart. As mentioned for Week 39, we were hoping that Golden Week might be cause for a pause, and that a little consolidation would kick in.

Candlestick chartists might call this a “harami“; the range of
the last candle is contained within that of the previous one and showing the opposite motion.
In this case we see a ‘down’ candle contained within the range of the previous ‘up’ candle. Is this cause for gloom?
It has been for the past few moves in the Handies, although the previous consolidation in the 465 – 500 range provided a good base for the move up of recent weeks.
Our recent target of 635 – 650 may become the resistance level, and support could be seen at our previously mentioned zone around 520 – 550.

The bullish MACD may not be over-extended yet, and the RSI at 82.06 has pulled back with the flattening of the index in the low 600s. It remains to be seen if the Handy Index shows a similar pullback to the Supras.

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SUPRAMAX:

All the talk of “dark clouds” in our last epistle seems to have been borne out by Week 40’s action in the Supra Index. A somewhat bearish-looking continuation of the previous chart formation was seen for Golden Week.

The lagging MACD is showing slight signs of buckling and our RSI pulled back below 70 as the Supra Index retreated.

Should this trend continue, the 875 – 900 region we’ve
mentioned before could become support for consolidation below our upside resistance target, still around the 1100 area.

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PANAMAX:

The somewhat alarming downswing in the Panamax Index before Golden Week took an interesting turn. For Week 40 the index bounced solidly off our support target of 1250 and finished the week at 1406.

Our next resistance target is around the 1600 area, and there’s hope for continued support from the 1250 level. For now, it seems to be following the “steps-up/steps-back” pattern we’ve been seeing for the past few months. The “knuckle” seen in the MACD eased up a little, and the RSI stayed in the 60s as the Panamax uptrend continued.

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CAPESIZE:

We made observations before on the Cape Index seemingly following the measured steps of the Panamax Index, and Golden Week seems to have offered similar action.

We’ll have to see if the noises we made about “dark clouds” for the Capes become noteworthy. For now the Capes have built themselves another step, but this index’s volatility usually has us cautious.

The lagging MACD has regained its composure, but the RSI continues on with its peakish behaviour (for the Cape Index at least) at 72.25. With our upside resistance still around the
3250 region, we can hope for some consolidation in the 2600 – 2700 range. However, our possible support zone is still in the 1800 – 2000 area given our caution on the Capes in general,
and this candlestick formation in particular.