Technically the index is back in bullish territory, and will remain so above USD 20,427. Although price action is the lead indicator there is a note of caution due to the bearish divergence forming with the stochastic on the weekly chart.

Capesize Index

Support – 20,427, 19,893, 17,929, 16,819,

Resistance – 22,515, 22,450, 27,866

Weekly stochastic in overbought territory

Daily stochastic at 51

Lower pricing from the technical resistance on the back of a small bearish divergence is pushing the index to its nearest technical support

Technically the trend remains in bullish territory as it continues to make higher highs and higher lows on the weekly chart. A close below USD 20,971 would suggest that the technical could be entering a corrective phase, however the base of bullish breakaway gap at USD 20,427 will also be a key support. A close below USD 17,929 would neutralize the current bull trend and could attract technical sellers to the market as the probability of a lower high forming will have increased.

Price action is the lead indicator and this remains bullish, however the overbought stochastic is diverging and market longs should remain cautious because of this.

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Capesize Nov 17 Daily

Support – 18,700, 18,400, 17,635

Resistance – 20,725, 21,047, 22,090

Daily stochastic is at 70

The breakout to the upside form the ascending triangle resulted in upside price action on the Nov futures with it achieving a 50% move of the base to USD 20,725. We have now entered a corrective phase and closed below the breakout level and the recent low of 19,360. This would suggest the current upward move has now been neutralized with the new low increasing the probability of a lower high forming in the market. Upside moves that fail to make a lower high would have bearish implications going forward from a technical perspective.

Market buyers now need to see a new high form (above USD 20,725) in the market. This would suggest that the buyers are gaining control, and increase the probability of a higher high forming putting the technical back into bullish territory.

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Capesize Q1 Daily

Support – 10,260, 10,035, 9,765

Resistance – 11,386, 11,705, 12,023

Stochastic is at 78

The Q1 18 futures have recently made a higher high and remains in bullish territory and at this point remains so above USD 10,260.

Downside moves that hold above USD 10,260 would imply upside continuation. However a lower high should have market longs prepared for either a potential directional change in trend or a consolidation phase within the current trend.

A close below USD 10,260 would suggest the technical is weakening and the potential for a lower high would increase.

Technically bullish, but in a corrective phase

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Capesize Cal 18 Daily

Support – 13,744, 13626, 13,415,

Resistance – 13,503, 13,464, 13,865

Stochastic is at 28

Last week price action held above the 200 period MA and the previous bullish divergence in the market came into play, resulting in higher pricing. Like the Q1 18, the Cal 18 futures is back into bullish territory, as it is producing higher highs and high lows.

Key technical support is at USD 13,415 and at this point above this level the technical should be regarded as bullish, below this level would neutralise the current bull trend and increase the probability of a lower high forming.

Ultimately bullish above USD 13,415, technical pullbacks that hold above USD 13,626 would suggest a higher high could form, however this is greatly increased if we stay above USD 13,744 as the lower the pullback the weaker the technical.

Note the 200 period MA is now at USD 13,404 and this is often a good directive of the longer term trend.

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Source: Hellenic Shipping News.