Capes brighten further, Handies fade. Baltic Dry Indices: Week 16 commentary.

by Dave Walker

HANDYSIZE

For Week 16 the retreat in the Handysize index shrank somewhat, with a small gap down at open and a tight 9-point range that trickled down to a 390 Friday fix.

Even as the index continued to drop, the RSI showed some divergence as it rose to 36.10 and a hint of coming strength. The flattish MACD crept closer to the signal line, following the fading index.

Our previous comments about a weakening downturn may be gaining some credibility with Week 16’s action, but as before we’re keeping a watchful eye on the lower 300s, just in case.


SUPRAMAX

In Week 16 the Supramax Index climbed, almost cancelling out the previous week’s decline to fix at 732. Our recent comments about a weakening downswing gained some credence with the move.

The RSI and MACD both ticked upwards with Week 16’s action, the RSI showing a stronger-than-neutral 44.40 and the MACD turning away from a possibly bearish signal line crossing.

One swallow does not a summer make, and our ideas of support building at the 550-600 area are still a possibility. Should some index strength develop after the recent turn down from our 775 – 875 resistance zone, that same zone could become upside resistance again.


PANAMAX

The Panamax Index surged in Week 16 to clear recent consolidation and fix at 1162. Overall strength in the index has helped it through our 975 – 1000 resistance thoughts

The RSI gained to reach 50.97 as the lagging MACD surged uninterrupted on its bullish run. In recent history the RSI in the mid-to-upper 60s has indicated peakishness, so a watchful eye is on this indicator.

After this push by the Panamaxes through our 975 – 1000 resistance zone, the peakish signs appear to be building but we may have some climbing room yet. We’ll also watch the recent resistance area for lingering influence.


CAPESIZE

For Week 16 the gloom in the Capesize Index lifted a little further, seeing a gap up and rise to a 490 fix. The tight range of only 45 points may reflect some cautious steps in the face of such fragile fundamentals for the Capes.

The RSI rose to “normal” bottoming values at 24.27 and the MACD parked on the doorstep of bullishness, almost crossing its signal line.

Our 1000 – 1200 upside target is still on the radar while the Capes struggle to rise from the mud. A failure to reach that zone is a possibility as we watch for weakness to creep in. Some consolidation, even just below the target, would be a welcome sight.


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