Capesize
March Futures – We highlighted last week that USD 21,382 was the key resistance to follow as price remained vulnerable below this level. The futures traded to a high of USD 21,250 before entering a corrective phase. The move lower was driven be outside events after Russia invaded the Ukraine, resulting in the futures trading below the USD 16,250 support, meaning the technical is now bearish. Downside moves below USD 15,630 will target the USD 14,100 and USD 12,169 support levels. Upside moves that fail at or below the USD 19,346 level remain vulnerable to further tests to the downisde, above this level price will target the USD 21,250 fractal resistance. Price is technically bearish having made a lower low; however, at USD 15,650 we are on Fibonacci support with the 1-hour intraday technical producing a positive divergence. This is not a buy signal it is a warning that we have the potential to see a momentum slowdown and warns we have the potential to see a small test to the upside in the near-term.
Panamax
March futures-Technically bullish last with the expectancy that the futures had the potential to trade to a new high. We questioned what the ever-changing geopolitical landscape will have on the Black Sea? Not a good one, the invasion into the Ukraine has basically meant that it is now part of a war zone. The futures had traded up to USD 26,500, just USD 375 below the high, however on news of the invasion price has gapped lower and is now at USD 22,625. The technical has a neutral bias due to the deep pullback but is only bearish below USD 24,125. The index and price are now at an equilibrium due to the uncertainty in the market; However, with the index moving lower it would suggest that we could see the futures come under further pressure in the coming days. One positive for freight/Panamax is the rising coal price, with many dependant on Russian gas/oil it does warn that there is the potential for a switch to coal which could support longer-term freight prices.
Supramax
March futures – obviously a change in the geopolitical landscape has resulted in the futures moving lower, price did trade up to the USD 29,500 high but not above it. We noted on Friday that the strong upside moves in the Q2-22 and the Cal 23 looked like a dead cat bounce as our Elliott wave analysis suggested the technical had finished a 5-wave cycle on the intraday. Price on the Q2 is USD 2,000 lower today suggesting our analysis is correct, this would also imply that the March contract is now corrective/bearish, making USD 25,144 the key support to follow; downisde moves below this level would suggest we could test and trade below the USD 22,900 in the near-term. Technically we remain in bull territory but based on our wave analysis in the Q2 and the Cal 23 we have the expectation that support levels will be tested.
Oil
May futures – We noted last week that it would be hard to justify any form of technical sell due to the approaching conflict. Although our analysis was less technical (even though it was supported by a bullish Elliott wave cycle) it was however correct. Oil has traded to a high of USD 105.79 with the Elliott wave cycle remaining bullish, we have a near-term upside target at USD 107.11 with further resistance at USD 111.74. Price is currently retreating have gapped higher on the open as the U.S and its Allies look at releasing strategic reserves. However, downside moves that hold at or above USD 95.38 will support a bull argument, below this level the technical will have a neutral bias, only below USD 90.12 will it be bearish. Technically bullish with the potential to trade to new highs, any oil release could push price lower but if it holds above USD 90.12 then there is a chance it could run again.
Ore
March futures – Lots of outside influence from the NDRC had been hampering upside moves until today, price has now broken the USD 141.75 fractal resistance on the intraday meaning this is now in bullish territory. Price is now targeting USD 146.29, if broken then the technical will have a neutral bias, only above USD 157.25 is it bullish. As previously noted, the upside move from the USD 84.60 low had no semblance of an Elliott wave cycle, suggesting the upside move had been a corrective one. For this reason, we maintain our bearish view even as the USD 146.29 resistance comes under pressure. Downside moves below USD 136.27 will target the USD 125.00 support. The caveat will be the cost of steel which has the potential to rise on the back of the war in Ukraine, this has the potential to keep margins elevated which could in turn keep price elevated but is outside of the technical footprint at the moment.
Steel
April futures – A noted previously noted the futures were technically bearish but were not considered a technical sell due to a positive divergence with the RSI, the futures have moved higher and rolled into the April contract with price nearing the USD 1,144 resistance. We also highlighted that the Elliott wave cycle would suggest that this upside move should be considered as countertrend, corrective moves higher that fail at or below USD 1,288 remain vulnerable to further tests to the downside, only above USD 1,464 is the technical bullish. From a technical perspective we remain bearish in what looks to be an upside countertrend move; however, we remain conscious the war in Ukraine has the potential to increase the cost of steel production due to the current sanctions. This has the potential to change the psychological footprint of the futures in the long-term, making USD 1,288 the key resistance level to follow at this point.
Tanker TD3
March futures – Last week we highlighted that the futures were not considered a technical sell due to the divergence. We have obviously seen a large upside move that is driven by the Russian invasion of the Ukraine. The technical warned that we could turn, the outside events have obviously pushed price way higher than it would in a normal market condition. The technical is now bullish based on the futures making a higher high supported by the RSI that is above 50, downside moves should be considered as countertrend. Support is at USD 8.2709 and USD 7.9740, corrective moves lower that hold at or above USD 7.5714 will support a bull market, below this level the futures will have a neutral bias. Technically bullish the futures will now target the USD 9.9940 and USD 10.5000 fractal resistance levels
Coal
March futures – As previously noted the Elliott wave analysis had indicated that we had looked to be on a corrective wave-4 indicating that we had a bullish impulse wave-5 to follow. We also highlighted that the oversold stochastic whilst the RSI was below 50 warned that we could be about to see a move to the upside. As noted in other commodity products the driving force is coming from the Russian invasion of the Ukraine, who produce 90% of their coal in the East. The new high means that we have a negative divergence between price and the RSI, this is not a sell signal it is a warning of the potential for a momentum slowdown, as it can and does give false signals, especially at times like this. Technically bullish, resistance is at USD 460, USD 484, and USD 509. Downside moves that hold at or above USD 408 will support a bull argument, below this level the futures will have a neutral bias, only below USD 387 is it bearish.