Capesize blip, Handies & Supras weaken. Baltic Dry Indices: Week 14 commentary.

by Dave Walker


HANDYSIZE

In Week 14 the Handysize Index gave more credence to our resistance ideas around the upper 400s. We first identified this zone as around 500 back in Week 8. Falling away from the Week 13 high of 467, it turned down and fell to a 432 Friday fix.

The RSI tailed off a little to settle at a still-weak 33.92 as the MACD also flattened out after crossing to the bullish side of the signal line in Week 13.

At the moment, it appears that the Handies may not have the strength to push higher and penetrate our upside resistance thoughts. Amidst signs of temporary peakiness as we cast our chicken bones and pixie dust, there remains the hope for some consolidation after the welcome (but partial) recovery.


SUPRAMAX

The clouds grew darker for the Supramax Index in Week 14, after spending the last month wavering in our 775-875 upside resistance zone that we first proposed back in Week 7. Gapping down slightly on the open, the index fell 65 points to fix at 742.

The RSI tailed off to just below neutrality at 38.97 while the freshly bullish MACD also weakened in strength.

With Week 14’s strong retreat, it remains to be seen whether the index continues to turn down or displays some attraction to our 775-875 zone in a consolidation move. Should things turn gloomier we are casting a jaundiced eye towards the lower 400s area for possible support (…perish the thought).


PANAMAX

The Panamax Index paused in Week 14, staying in a tight 17-point range. From a 1110 open to an 1127 peak and fix at 1114, the index hinted at some consolidation. Our Week 13 thoughts of possible resistance at these levels may have gained a little traction.

The lagging MACD continued on a bullish path while the RSI flattened out at a neutral-ish 38.89, barely above Week 13 values.

After pushing slightly through Week 8’s resistance ideas in the 975-1000 range, (and a weak resistance area around 900) the slight signs of peakishness are creating a little unease. We’re watching to see if the Panamaxes have enough strength to clear our resistance hurdle.


CAPESIZE

A recovery to a 276 fix marked the Capesize Index for Week 14. This mere blip in the big picture was probably little comfort to shipowners. A slightly encouraging sign was the barely-visible lower wick on the Week 14 candlestick that marked the horrendous low of 92. With the index not showing any revival signs until late in the week, the hope is for a forthcoming pick-up in momentum.

The RSI rose into normal bottoming territory at 20.57 as the heavily negative MACD flattened out further, wandering closer to the signal line.

Yes, bottoming territory indeed, but where next for the Capes? With our initial upside target (and possible resistance) in the 1000-1200 area, that leaves a fair amount of space for the index to dribble around in. A characteristic index snap-back blowing through our initial target would be a welcome sight, but those nasty Capesize fundamentals might betray us yet.

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