Folks, I am still trying to get up to speed on this from a fundamental standpoint, but the charts are the charts and that is really what NFTRH+ cares about. For some perspective on the Baltic Dry Index see this post…
Baltic Dry Index a Positive Signal for Commodities?
The pattern nerd in me is very interested in this weekly chart…
Here is a graphic per my Fidelity news module that lists some shippers. I simply went through them and picked out the charts I liked best and then reviewed the companies very lightly. You should do so in depth for a fundamental take.
The first is the Hong Kong based SSW, which was sent my way by Joe (I wish I had the ability to churn as many charts in a day as he does), a subscriber who is a very experienced investor/trader. It is what got me looking into the BDI to begin with. I am not even going to mark up the chart. It is in an interesting daily pattern and as of now above the up turned SMA 50 and the down sloped SMA 200 as it may be breaking upward from a bull flag. A reasonable target is around 10. A strict stop loss is below 6.70.
Another shipper is EGLE, based in Connecticut, USA. It is in a bullish looking bottoming pattern and the best buy would have been on the recent test of the SMA 50 at 4.50. But I had not been aware of the stock at the time. So now we are left with a constructive looking pattern that may soon test the down sloped SMA 200, which corresponds with visual lateral resistance. A subsequent buy in the 4.70 to 4.80 (EMAs 10 & 20) range might work out well (another test of the SMA 50 is quite possible as well) if the sector view stays constructive. I already chased and bought it this morning because ideally it would play a part in a portfolio, not be a fancy short-term trade. We’ll see. I am not going to ride losses in this market. A would-be break above the 5.10 to 5.20 resistance would target 5.90.
I am still trying to get comfortable with the play in shippers and have to admit that I am a sucker for the BDI chart, drawn to it like a moth to a light. But that is me. You might want to evaluate the long out of favor sector from the ground up, using my input as just one piece of the puzzle. Aside from the patterns, my interest is due to “the long out of favor sector” aspect. After all, where was the excitement in Semiconductors in early 2016 and Lithium in early 2017 when we highlighted them?
Final note: It is important to keep in mind that the BDI is not an index of shippers. It is an index of shipping costs/prices and by extension a forward gauge on inflationary effects and commodities. When rising it can be an indicator of improving supply/demand fundamentals for the shipped commodities and by extension, the shippers of those commodities.
A reminder that chart based NFTRH+ updates are technical trade setup ideas, which may not be revisited as the buy, sell, stop parameters are already noted. They are meant as a starting point for further research if interested. I will not personally buy every item highlighted and will sometimes sell – without prior notice (because this takes time and resource away from NFTRH’s main functions) – any item that I do buy, below target, which is something I often do as a trader. Also please be aware that I am not a fundamental stock analyst. Due diligence is your responsibility.
