by Dave Walker
Why add Breakwave Dry Bulk Shipping ETF to our Baltic Dry Index commentaries? Well, we’d like to dig deeper into shipping through this ETF tied to dry bulk freight futures. At just over a year since its inception, the fund focuses on the nearest quarter in dry bulk forward freight agreements. Will our observation of BDRY offer some noise-free insights amid the flood of information out there? Please join us as we explore*.
$BDRY profile: ” The Fund’s investment objective is to provide investors with exposure to the daily change in the price of dry bulk freight futures, before expenses and liabilities of the Fund, by tracking the performance of a portfolio consisting of a three-month strip of the nearest calendar quarter of futures contracts on specified indexes that measure rates for shipping dry bulk freight. ” Source: drybulketf.com
$BDRY Forward Freight Agreement weighting: Capesize: 50%, Panamax: 40%, Supramax: 10%
The Breakwave ETF continued on its recent recovery march to close Week 18 at 12.25. As the Baltic Capesize Index was striking lows below 100 in Week 14, BDRY had seen support just above the $9.00 area since early March.
At 37.90 the RSI approached neutral ground, having steadily climbed from heavily bottoming territory in recent weeks. The MACD followed on bullishly after a solid crossing of the signal line a couple of weeks ago.
After careful shuffling of our Tarot cards and casting of chicken-bones, BDRY may be pushing into our upside resistance target of $12 – $14. This region served as wavering support through late 2018 until weakness took over in early 2019.
The Week 18 move in this latest recovery attempt gapped up at the open but showed little progress thereafter, hinting at possible slower momentum. Should BDRY push further through these $12 – $14 resistance thoughts we may still see some consolidation around this zone.
As mentioned above BDRY has a 50% weighting towards the Capesize FFAs, and the Baltic Capesize Index itself has seen recent fragility. Even as that index surges (Week 18 Capesize & Panamax charts below), we’ll keep a jaundiced eye on that previous $9.00 support in BDRY.
*Disclaimer: superiormar.com holds no stock in $BDRY