A Room with a Technical View 15/08/22

Capesize

September Futures – We remain in a bearish trending environment, with the futures below all key moving averages supported by the RSI below 50. The futures have traded below the USD 10,950 low, creating a positive divergence on the intraday RSI, not a buy signal. It does warn that we have the potential to see a momentum slowdown. Price has traded to a low of USD 8,800, with the futures remaining in divergence. Intraday Elliott wave analysis would suggest we have a potential downside target as low as USD 6,443. Upside moves that fail at or below USD 16,712 will leave the futures vulnerable to further tests to the downside; above this level, the technical will have a neutral bias.

 

Panamax

September Futures – Having previously noted that we witnessed wave extension, the futures continue to move lower. Price is below all key moving averages supported by the RSI below 50; the futures have now traded to a low of USD 10,250. The intraday and daily divergences have now failed, supporting a bear argument; wave analysis suggests that upside moves should be considered countertrend at this point. Upside moves that fail at or below USD 15,827 will leave the futures vulnerable to further tests to the downside; above this level, the technical will have a neutral bias. Technically bearish with near-term support at USD 9,767, upside moves are still considered countertrend.

 

Supramax

September Futures – having rejected the upside resistance zone between USD 19,600 – USD 20,000. The futures have traded below the USD 17,500 support, to a low of USD 15,500, below our USD 15,762 target. We remain below all key moving averages supported by the RSI below 50; upside moves that fail at or below USD 18,453 will leave the futures vulnerable to further tests to the downside; above this level, the technical will have a neutral bias. The intraday and daily technical are in divergence with the RSI, not a buy signal. It does warn that we have the potential for a momentum slowdown. Technically bearish, with near-term support at USD 13,360, the divergence will need to be monitored going forward.

 

Oil

October Futures – As noted last week, the futures from a technical perspective were not considered a sell; the upside move above USD 97.77 meant the technical had a neutral bias. The futures have now traded above the USD 100.38 fractal resistance, meaning the technical is now bullish. We are coming under pressure this morning, 30/08, with the futures USD 2.20 lower, warning support levels could come under pressure; however, our intraday Elliott wave analysis would suggest downside moves should be considered as countertrend at this point. Corrective moves lower that hold at or above USD 100.60 will support a bull argument; below this level, the technical will have a neutral bias, and only below USD 98.10 is the technical bearish. Technically bullish, having found support on the 200-period MA, the price is now rejecting the 55-period MA (USD 104.34). Upside moves that close above and hold above this level will further support a bull argument. Key support to follow is at USD 101.60; if broken, the USD 98.10 fractal support will become vulnerable.

 

Iron Ore

September Futures – The futures broke the consolidation phase to the upside but failed to trade above the USD 108.91 resistance, leaving the technical vulnerable to further tests to the downside. Price has moved lower with the USD 100.35 fractal low being broken; the intraday divergence has failed with the futures trading to a low of USD 96.35 (current price USD 97.85). We maintain our longer-term view that the futures should trade below the USD 95.50 low, with a potential downside target as low as USD 89.30. However, a new low will mean that the minimum requirement for wave/phase completion will have been met, meaning the futures will be in divergence with the RSI. Not a buy signal. It will need to be monitored going forward if a new low is achieved.

 

Steel

September Futures – Technically bearish last week with the futures in divergence, intraday Elliott wave analysis, although not clear, warned that we might have another test to the downside. The futures traded from USD 810 to a low of USD 769 before trading back to USD 815. The futures remain technically bearish with prices below all key moving averages; upside moves that fail at or below USD 838 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

September Futures – As noted last week, the new high in price and the RSI suggested we were on an extended wave 3 and not a wave 5, with downside moves considered as countertrend. The futures have traded back up to new highs, with prices above the USD 16.2210 resistance but below the USD 17.3646 level. The daily RSI is now in divergence with price, not a sell signal; it does warn that we have the potential to see a momentum slowdown. Elliott wave analysis suggests we remain in a bullish wave 3, meaning downside moves should be considered countertrends. Corrective moves lower that hold at or above USD 13.4114 will support a bull argument; the futures will have a neutral bias below this level. Resistance is now at USD 17.3646, USD 18.8962, and USD 19.5315. Technically bullish, the divergence will need to be monitored.

 

Coking Coal

September Futures – Having broken fractal resistance last week, the futures entered bullish territory; the MA on the RSI implied that downside support levels should hold in the near term if tested. We have seen a minor pullback just below the USD 319.50 resistance, with the price closing at USD 300; downside moves that hold at or above USD 240 will support a bull argument; below this level, the technical will have a neutral bias. Key resistance remains unchanged at USD 356; upside moves that fail at or below this level warn that this move higher is potentially part of a more significant, more complex corrective move. The MA on the RSI continues to suggest that support levels should hold if tested in the near term.