fis technical - capesize 26-6-17 - freight investor...

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constitute any recommendation on our part. The information has been prepared without taking into account your investment objectives, financial

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Technical Report Global Leader Dry Bulk Derivatives

FIS Technical - Capesize

Highlights:

• Capesize Index- A mean reversal is

currently underway. The trend remains

bearish, market buyers should look to

the daily chart for a higher low before

entering.

• Q3– A higher low on the back of

technical support and bullish divergence.

Currently mid-range, the Q3 has the

potential to consolidate from here.

• Cape v Panamax Q3 17 spread – Support

has held, there is a potential to revert

back to the technical resistance.

However we continue to see fresh lows

and until this changes the trend should

be considered as bearish.

• Q3 v Cal 18 – A technical bounce, but

from a lower low. USD – 185 is an

important level, price rejection from

here would suggest a test of the lows.

Technical Analyst

Edward Hutton

44 20 7090 1120

[email protected]

Client Relations

Andrew Cullen

44 20 7090 1120

[email protected]

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Capesize Index

Support – 7,618, 6,570, 4,630

Resistance – 9,837 11,577, 11,737, 12,508

The Capesize index is starting to mean revert back to the

technical resistance at USD 9,837, or the 8 period EMA (USD

10,005)

The stochastic remains oversold, but the trend remains

technically bearish, with a new low printed at USD 7,618 last

week.

Upside moves that fail to close above the resistance zone

USD 9,837 – USD 10,005 would suggest further downward

moves, with the USD 7,618 being the most logical target.

Market buyers should continue to look to the daily chart for

early entry signals in the form of a higher low (above USD

7,618) before looking to enter.

From a technical perspective the trend remains bearish, and

buyers should remain on the side lines until a higher low

presents itself.

Source Bloomberg

Capesize Q3 17 Daily

Support – 11,620 11,400, 11,124, 10,351

Resistance – 13,853, 14,157, 14,694

In The bullish divergence last week resulted in the support

holding and a higher low has now been created.

The higher low attracted technical buyers and the futures are

now trading USD 900 higher. However from a technical

perspective we are now mid-range, making this a dangerous

area to enter the market.

Upside moves that fail at the USD 13,853 resistance would

confirm that the Q3 futures are now in a consolidation phase.

Rejection from this level should attract technical sellers

looking for near term moves to the downside support.

Buyers that are not already long should now wait for another

higher low before entering, with an upside target at the USD

13,853 technical resistance.

A higher low, but the potential to consolidate within range.



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Capesize v Panamax Q3 17 Spread

Support – 2,735, 2,454, 2,165

Resistance – 4,243, 5,000 5,837

Support held last week on the Cape v Panamax Q3

spread, with prices back above the USD 3,100 level.

The stochastic remains in oversold territory, and the

trend remains technically bearish. The confirmation of

the support zone would suggest that there is potential to

revert back to the technical resistance at USD 4,243.

There is interim resistance at USD 2,154 in the form of

the 8 period EMA, however the 34 period EMA seems to

have been the more respected average so far this year.

Failure at the resistance would attract fresh technical

sellers.

A close below USD 2,454 would suggest further

downside continuation, targeting the USD 2,165 support

area.

Market buyers that haven’t taken near term long

positions off the support level should wait for a higher

low before entering. Upside target, USD 4,243. Source Bloomberg

Capesize Q3 v Cal 18 Daily

Support – (907), (-1,046), (-1,282)

Resistance- (-185), 294, 782

The mean reversal we spoke of last week is currently

underway. Support held on the bullish divergence and we

have now seen a USD 500 plus rally in the spread.

The stochastic on the daily chart is oversold, however the

recent low was a fresh low, and keeps the trend bearish. For

this reason we are still looking for a mean reversal, rather

than a market bottom.

Technical resistance can be found at USD – 185 and USD

294. A failure at the first resistance would suggest further

downside pricing, with the recent low at USD – 839 being

the next logical target.

Downside moves that fail to close below the USD – 839 level

would create a higher low and should attract technical

buyers into the market, targeting USD 294.



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Technical Analysis Glossary

Pivot Point

A point where the market makes a new high or low, before reversing in direction.

Trend Line

A directional line connecting pivot points.

Primary Trend

The main trend line over an extended period of time.

Secondary Trend

Distinct from but within the primary trend. Indicates recent trend.

Support

A previous market low where market participants have been prepared to enter long positions.

Resistance

A previous market high where market participants have been prepared enter short positions.

Range

An area between the support and resistance.

Relative Strength Index (RSI)

A technical momentum indicator that compares the magnitude of recent gains to recent losses in an attempt to determine

overbought and oversold conditions in an asset. The RSI ranges from 0 to 100.Typically speaking, an asset is deemed to be

overbought once the RSI approaches the 70 level, and likewise, as the RSI approaches 30, it is deemed to be oversold.

Fibonacci Retracement

Refers to areas of support or resistance. A Fibonacci retracement shows the potential retracement of a financial asset

relative to the original move in price. A trend line is drawn between two points and then the vertical distance is divided by

key Fibonacci ratios; 23.60%, 38.25%, 50.00%, 61.80% and 100.00%. This tool can also be used as a projection method.

Moving Average Convergence Divergence (MACD)

A trend-following momentum indicator that shows the relationship between two moving averages of prices. The MACD is

calculated by subtracting the 26-day exponential moving average (EMA) from the 12-day EMA. A nine-day EMA of the

MACD, called the "signal line", is then plotted on top of the MACD, functioning as a trigger for buy and sell signals on the

crossover of the two lines. The histogram highlights the narrowing and widening of the two averages acting as an indicator

for slowing or increasing momentum in the market. I.E a flattening or decreasing histogram in an upward market would

suggest that the upward move could soon stall.



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Award winning broker

In 2015 FIS was named as the best performing inter-dealing broker in Iron Ore swaps and options by Singapore-based SGX

AsiaClear for the third consecutive year.

For More information on this report please contact:

Edward Hutton

Tel: +44(0)20 7090 1121

E-mail [email protected]

fis technical - capesize 26-6-17 - freight investor...

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