Panamaxes dithered, Capes snapped back – a little. Baltic Dry Indices – Week 11 commentary

by Dave Walker

HANDYSIZE

A small gap-up at the open for the Week 11 Handysize Index was tempered by a narrower range than seen previously; 13 points for the week as the index approached our upper 400s resistance thoughts from our Week 8 commentary.

The RSI rose slightly out of bottoming territory to 30.43 as the index momentum weakened, and the MACD stayed on course for a possible bullish intersection with its signal line.

Week 11’s index action may be hinting at building resistance as it reaches for the upper 400s, but there may be some continued strength in this up-move yet.


SUPRAMAX

Week 11 marked a pause in the Supramax Index after some shrinking momentum seen over the previous two weeks. Closing the week at 786 on a tiny 4-point range, the index paused in the middle of our 775-875 resistance zone mentioned back in Week 7.

The RSI lazily flattened out in neutral territory while the MACD crossed the signal line to the bullish side, offering some hope of further upward movement.


There may be room left in this zone, and it remains to be seen if the Supramaxes have the momentum reserved for a push through our 775-875 resistance thoughts from Week 7.


PANAMAX

For Week 11 the Panamax Index paused in indecisive mode, hitting an 823 low during the period but staying mostly close to the 883 fix for the week. Adding to the gloomy-sounding candlestick names from Week 10, what do we have here? A bearish Hanging Man?

Regardless, there seems to be a degree of uncertainty with the Panamaxes as the index dithers just below our 900-region lower resistance target. The RSI lingered near its bottoming zone at 27.31 while the MACD aimed at a possible bullish signal-line crossing.

The next test for the Panamaxes may be an attempt to get through our 900 resistance zone in Week 10’s commentary. However, given the indecisive-looking candlestick chart, the consolidation of the past two weeks may be hanging on by its teeth.


CAPESIZE

The Capesize Index came back with a rush in Week 11 to close at a promising 520. Over the past few weeks, we’ve commented on possible mid-200s support, mid-500s “attraction” and a possible recovery flagged by a divergent RSI. Week 11 saw a bounce back from a mid-200s open to a mid-500s close – too easy, you say? Possibly, since the Cape Index had little room to manouevre anyway; however the move appeared to confirm all our wayward ideas in one fell swoop.

The RSI flirted with bottoming territory once more, reaching 31.75. The MACD stayed almost level and hinted at an upcoming bullish signal-line crossing.
So what’s next for the Capes? Even with the volatile propensities of the index, let’s make a quick nod towards fundamentals and acknowledge the gathering storm clouds in Brazil after the tragic tailings dam collapse and the resulting microscope on similar installations.

Also casting shadows was the Chinese customs wrinkle with Australian coal shipments, all no doubt playing a part in the Cape index dive. Of course, being chart-watchers we’ll ignore all those distractions. Our estimates haven’t ruled out another bounce off the bottom as yet, however some casting of the chicken-bones gives us an upside resistance target somewhere in the 1200-1500 range.

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