A Room with a Technical View 05/09/22

Capesize

October Futures – The futures roll has resulted in the technical producing an upside gap due to the carry against the September futures. We have seen a couple of bullish days following the roll, resulting in price trading into the Fibonacci resistance zone; however, the upside move has failed to trade above the USD 16,627 resistance leaving the technical vulnerable to further tests to the downside. The resistance rejection has resulted in the futures trading USD 1,375 lower today (current price on the 05/09 USD 13,875), meaning we are trading below Friday’s low (USD 14,500); a close below this level will warn that support levels could be tested. Downside moves that hold at or above USD 11,132 will support a near-term bull argument; below this level, the USD 8,625 low is vulnerable. Technically bearish with price rejecting a key resistance, warning that support levels could be vulnerable.

 

Panamax

October futures – Technically bearish last week with upside moves considered countertrend, the September contract traded to a low of USD 9,225 before moving higher on the back of the roll. Key resistance is now at USD 15,478; upside moves that fail at or below this level will leave the technical vulnerable to further tests to the downside; above this level, the technical will have a neutral bias (current price USD 14,450). Only above USD 18,700 is the daily technical bullish. Near-term momentum is to the buy side, but the price is below key resistance; we maintain our view (based on Elliott wave analysis) that upside moves should be considered countertrends.

 

Supramax

October futures – The futures have moved higher on the back of the intraday divergence highlighted last week, resulting in futures trading up to USD 16,700. Key resistance is now at USD 18,011; upside moves that fail at or below this level will leave the futures vulnerable to further tests to the downside; above this level, the technical will have a neutral bias. Only above USD 19,975 is the technical bullish. Technically bearish, momentum is currently to the buy side; downside moves that close on the intraday 4-hour candle below USD 15,000 will warn that the USD 14,200 low could be tested and broken.

 

Oil

November futures – Technically bullish last week, with intraday wave analysis suggesting that downside moves should be considered countertrends. The calming of the escalation of violence in Iraq resulted in the futures trading below all key support levels, to a low of USD 91.81. We are seeing a bullish overtaking candle today, a move driven by OPEC announcing they will cut production by 100,000 bpd in October. The upside move is not technical, but the production cut will have bullish ramifications. Upside moves that fail at or below USD 100.83 will leave the futures vulnerable to further tests to the downside; above this level, and the technical will have a neutral bias; only above USD 105.48 is the technical considered bullish. OPEC have signalled their intent to support prices, suggesting upside resistance levels are now vulnerable.

 

Iron Ore

October Futures – As noted last week, our wave analysis indicated that the USD 95.50 low remained vulnerable, with a potential downside target at USD 89.30; however, a new low would mean the minimum requirement for wave/phase completion had been achieved. The price traded to a low of USD 92.75 before finding buying support. Upside moves that fail at or below USD 102.09 will leave the futures vulnerable to further tests to the downside; above this level, the technical will have a neutral bias, and only above USD 106.90 is the technical bullish. The futures are moving higher on the back of a positive divergence with intraday wave analysis warning of possible exhaustion in the market, making Key resistance to follow at USD 102.09. If we trade below USD 92.75, we target the USD 89.30 level.

 

Steel

October futures – Technically bearish with the potential for another test to the downside, the futures have moved slightly higher; however, the technical itself remains unchanged, meaning we reiterate last week’s view. Key resistance remains unchanged at USD 838 (currently 810); upside moves that fail at or below this level will leave the futures vulnerable to further tests to the downside; above this level, the technical will have a neutral bias. Only above USD 875 is the technical bullish. Intraday wave analysis continues to suggest we could still have another test to the downside with the potential to trade as low as USD 740, making USD 838 and USD 875 the key resistance levels to follow.

 

Tankers TD3

October futures – We noted last week that although technically bullish, we had a negative divergence in play, not a sell signal. It did warn that we had the potential to see a momentum slow down, resulting in both the September and October contracts moving lower. Last week we noted that the futures looked to be on a bullish Elliott wave 3, suggesting downside moves should be considered countertrends. The futures now look to have entered a countertrend wave 4 with key support at USD 13.2580; the price is bullish above this level and neutral above. The RSI is above 50 with the stochastic in oversold territory, and momentum warns that the futures are vulnerable to further tests to the upside.

 

Coking Coal

October futures – Resistance held last week, resulting in the futures failing to trade above the USD 342 level. However, the RSI on the MA suggested that support levels could hold if tested. Downside moves that hold at or above USD 251 will leave the futures vulnerable to further tests to the upside; below this level, we target the USD 218 low. The futures remain below key resistance and are potentially in a more complex corrective wave 4. We remain cautious regarding the upside rejection at this point, as corrective patterns often come in 3 waves, leaving the futures vulnerable to another test to the upside, making essential support to follow at USD 251.