Dry Bulk FFA: Supramax Index Sideways price action within a resistance zone
Supramax Index Weekly
Support –9,081 8,486, 7,948
Resistance – 9,794, 10,198, 11,016
The trend remains bullish and we are now in the technical resistance zone between USD 9,650 – USD 10,198. Sideways action on the daily chart has resulted in the stochastic making a fresh high into the overbought zone with the bearish divergence now failing.
Sideways price action has resulted in the price action and the 10 period EMA converging on the daily chart. A close below USD 9,346 would suggest a corrective wave has begun and market longs should look to tighten risk. However, until the index produces a lower high the trend should be considered as bullish. For early signs of a trend reversal market sellers should look to the daily chart.
Supramax Oct 17 Daily
Support – 11,120, 10,190, 9,870
Resistance– 11,647, 11,810, 11,972
Support levels held last week and a new high keeps the October futures in bullish trending conditions.
Although momentum is overbought, this is also bullish territory as it remains above 70.
Price action is looking overstretched with a small mean reversion gap forming. This would suggest a corrective wave is due within the bull trend.
The market pullback on the 5-9-17 has created a small support at USD 11,120, a close below this level could signal a short term pullback to the 8 period EMA at USD 10,879, and potentially lower. However, we remain technically bullish above the more major swing low at USD 9,870. Market sellers need to see a lower high before looking for sell entries that involve more than a 1 day swing point.
Supramax Q4 Daily
Support –10,736, 10,006, 9,828
Resistance – 10,891, 10,987, 11,143
Resistance levels have been broken and fresh highs have been made keeping the trend conditions bullish
Short term momentum signals have started to weaken suggesting a corrective wave within the bull trend is due soon, potentially back to the 8 period EMA around the USD 10,558 level.
Ultimately the trend remains bullish unless we see a lower high form, or a close below the USD 9,828 support. At this point the trend will become neutral rather than bullish. Market sellers need to see a lower high form for anything other than short term counter trend moves. Market longs should look to tight risk on a close below USD 10,052 as this would result in a bearish reversal candle on the weekly chart, and increase the probability of a longer term corrective wave.
Supramax Cal 18 Daily
Support – 9,395, 9,185, 9,015
Resistance– 9,610, 10,567, 10,825
The stochastic continues to remain overbought but in bullish territory as the Cal 18 futures approach technical resistance at USD 9,610.
Technically bullish until it either produces a lower high, or trades below the USD 9,395 support, at this point the trend becomes neutralised and increases the probability of a lower high forming.
There are signs that the trend is showing signs that a corrective wave is due as the short period RSI is now showing a bearish divergence. Not a sell signal it does imply that momentum could be weakening and another pullback within the trend is due. Technically bullish but looking like it could enter a corrective wave soon.
Source: Freight Investor Services (FIS)