Capesize Index- a lower low and lower high would suggest the technical is weakening
Capesize Index– a lower low and lower high would suggest the technical is weakening. Market shorts should be cautious on a close above USD 20,427.
Nov – the previous wave made a higher high and a lower low suggesting the trend lacks direction, and has the potential to enter a consolidation phase. Caution on a close below USD 18,050.
Cape Q4 17 – Like the Nov futures we have the potential to enter a consolidation phase with the stochastic suggest upside moves could be limited. A close below USD 17,630 would suggest downside continuation and consolidation would be unlikely.
Cal 18 – Technically bearish, there is a potential that we could see a bullish divergence on a close below USD 13,374. Market sellers need to be cautious they do not get caught on a false breakout.
Support – 17,929, 16,819, 15,301
Resistance – 20,427, 22,450, 27,866
Weekly stochastic in overbought territory
Daily stochastic at 50
The oversold stochastic on the daily chart last week resulted in higher pricing for the index. However, the lower low indicated that there was a higher probability of a lower high forming, and this has been the case. Technically the index looks to be entering into a corrective phase on the daily chart.
However, we remain above the 10 and 20 period EMA at this point, and from a technical perspective a close below it would be preferable. Market shorts need to be cautious on a close above USD 20,427 as this would suggest that buying strength is increasing. The lower low and lower high would imply a weakening technical, and market longs should look to tighten risk. Key resistance is at USD 20,427, if broken it would suggest that the bulls are back in control.
Capesize Nov 17 Daily
Support – 18,050, 16,680, 16,410
Resistance – 18,930, 19,370, 19,410
Daily stochastic is at 81
The higher high and the lower low on the previous move would suggest the current trend lacks direction on the November futures. The stochastic at 81 is currently in overbought territory, and this would imply that upside moves could be limited. A close below USD 18,050 would suggest downside continuation targeting the USD 16,680 support.
The higher low is a positive for the futures, and could indicate upside continuation (currently only a one day higher close), however the stochastic would imply that this move could be limited and market longs should remain cautious.
The previous high low wave would suggest that the Nov futures have the potential to enter a consolidation phase. Caution on a close below USD 18,050 as below this consolidation is unlikely.
Source: FIS (Freight Investor Services)