Technical Round ups:
Capesize
February futures – Price is below all key moving averages supported by the RSI below 50. We continue to see a positive divergence between the RSI and the futures, this is not a sell signal, but it is a warning that we have the potential to see a momentum slowdown. Upside moves above USD 19,750 will create a higher high and be considered as bullish based on price; however, if we trade below the USD 15,325 key fractal resistance will drop to USD 17,750. Technically bearish and in trend, the RSI is at 36 and testing a long-term support that has been in place since March 2020, if the RSI support is broken the futures have the potential to test the USD 12,062 support. If the RSI support holds, we have the potential to see market shorts looking for cover.
Panamax
February futures – As previously noted in our technical reports, the upside move in December failed to trade above USD 26,600 leaving the technical in bearish territory. Last week we noted that the futures had opened the year by closing on the daily technical below the Stoller average range channel bands (STARC) warning the futures were technically vulnerable, this has resulted in a downside move of around USD 3,000. Price is now testing key support at USD 21,712, if this level holds it will support a bull argument, if it is broken price will target the USD 19,375 fractal support. Technically bearish and in trend price is now at a key level.
Supramax
February futures – The dominant bear trend created a lower low that formed between the 8 – 17 November 2021 (USD 27,250 – USD 20,750). The upside move in December traded to a high of USD 27,000 meaning the technical remained in bearish territory. Price has since moved lower with the futures now looking to test the USD 20,750 low, if broken this will create a positive divergence with the RSI. Not a buy signal it does warn that we have the potential to see a momentum slowdown, If the futures create a lower low then key fractal resistance will move from USD 27,250 to USD 24,250. It is worth noting that the longer period averages (30-60) remain well spaced, indicating that the trend is currently stable. Technically bearish with a near term downside target at USD 20,750.
Oil
March futures – we have seen a series of higher highs in the Brent futures, however key resistance is at USD 83.00. The recent upside move traded up to but not above this level, meaning price remains within the dominant bear wave that started on the 24/11/21, above this level the daily technical is bullish. Corrective moves lower that hold at or above USD 79.07 will support a bull argument, below this level price will target the USD 77.04 fractal support. The upside move since the 03/01/22 has seen increased volume and open interest which supports a near term bull argument; this also means that below USD 77.04 fresh Market Longs will potentially be looking to exit. This technical is in balance with USD 83.00 the key level to follow.
Ore
February futures – The trend remains technically bullish with price above all key moving supported by the RSI above 50. Price has traded to a high of USD 128.5, if we trade above USD 129.45, we have the potential to create a negative divergence, this is not a sell signal it is a warning that we could see a momentum slowdown. Downside moves below USD 115.03 would imply that the USD 115.03 Fibonacci support will be broken, if we hold above this level the futures remain technically bullish, below this level price will look to test the USD 107.60 fractal support. The recent upside move since the 29/12/21 has seen a small build in aggregate volume and open interest supporting a bullish move. Price is currently in a corrective phase but on lower volume, suggesting that market buyers are holding off rather than market sellers pushing price lower. Technically bullish but in the early stages of a corrective phase, upside moves have the potential to be limited due to the divergence above USD 129.45.
Steel
February futures – Price is below all key moving averages supported by the RSI below 50, the futures are making lower Lows and lower highs meaning the trend is bearish. Upside moves that fail at or below USD 1,312 remain vulnerable to further tests to the downside, above this level the technical has a neutral bias. only above USD 1,340 will price have made a higher high and be considered bullish. We are seeing a positive divergence with the stochastic; however, as we can see no significant pullback in price from the 02/12/21 suggesting this divergence should be ignored. Technically bearish and in trend with near-term support is at USD 1,245, USD 1,214, and USD 1,175.
Tankers TDC3
February futures – Price entered a bearish trending environment in November, the futures are below all key moving averages supported by the RSI below 50. The recent upside move has failed to trade above the USD 8.1761 resistance leaving the technical vulnerable to further tests to the downside, above this level the technical goes from bearish to neutral/bearish; only above USD 8.8850 will the futures have made a higher high above the last dominant bear wave to take the technical into bullish territory. Downside moves that hold at or above USD 7.1781 we will support a bull argument, below this level the futures will target the USD 6.8000 low. Technically bearish key levels to follow are USD 8.1761 and USD 7.1781.
Coking Coal
February futures – A very strong upside move last week was not technically related, it was based on the export ban; however, from a technical perspective upside moves like this are often unsustainable. A near USD 60.00 move last week means the trend has started to go parabolic, a key date to watch will be the 12/01/21 as price has the potential to open on the wrong side of the parabolic curve. The trend is technically bullish, but we do have a negative divergence with the RSI which warns of the potential for a momentum slow down; however, we feel focus should be on the parabolic trend rather than the divergence. The reality is that this market he’s not being driven by a technical move, although we highlight the 12/01/21 as a key date to follow we are not blind to the fact that this move is about the Indonesian export ban meaning the technical should be treated with caution.
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