Capesize

Jan 23 Futures – Technically bearish two weeks ago, we noted that the roll into Jan had created a positive divergence with the RSI, meaning we did not consider the futures a technical sell. We did move higher with price trading above the USD 10,453 level, indicating that the technical, although bearish, now has a neutral bias. Downside moves that hold at or above the USD 9,232 level will support a near-term bull argument; if broken, we target the USD 8,000 fractal support. Below this level, the daily technical is bearish. Bearish/neutral, the futures are holding the USD 9,232 level on the open. However, there has been no significant upside move at this point. The RSI is below 50 with the stochastic at 64; if the stochastic moves above 70, then momentum will be vulnerable to a test to the downside, providing the RSI holds below 50. If the RSI moves above 50, the stochastic is considered less relevant, and warning resistance levels are vulnerable. USD 9,232 is the level to watch on the technical; the index is lower today but remains above USD 18,000, suggesting that if we do not see a more sustained pullback in the index soon, the futures could be vulnerable to some short covering.

 

Panamax

Jan 23 Futures – Technically bearish on the last report, the futures traded above the USD 12,925 fractal resistance, meaning the futures were bullish based on price, warning that the bearish Elliott wave cycle may have completed. However, we noted on the 4 -page technical last week that although we have seen a 5-wave down within the current wave 5, we have not traded below the USD 9,225 low, implying we could be vulnerable to a new lower timeframe Elliott cycle lower. We highlighted the new fractal high at USD 13,150 as a key level in the future, as above this level would mean we had a bullish impulse intraday 5-wave pattern, suggesting we have potentially seen cycle completion (this is because counter-trend corrective waves should work in threes not fives). The futures have so far failed to trade higher, with the price currently at USD 11,600; downside moves below USD 11,269 will mean the pullback is deep into the last bull wave, meaning the technical has a neutral bias. This also warns that the USD 10,300 fractal support is vulnerable; if broken, it confirms cycle extension to the downside. On price, we are bullish but in a corrective phase; the Elliott wave cycle is less clear, and despite the move above USD 12,925, we are still vulnerable. For more information on the Elliott wave cycle, please read last week’s technical report. Panamax Technical Report 15/12/22 https://fisapp.com/wp-content/uploads/2022/12/FIS-PANAMAX-4-PAGE-TECHNICAL-REPORT-15-12-22.pdf

 

Supramax

Jan 23 Futures – The futures had previously traded to a new low of USD 10,750 before moving higher on the back of a positive divergence. The upside move failed to trade above our key resistance, resulting in the futures moving lower, and the technical remains bearish. Downside moves that hold at or above USD 11,251 will support a near-term bull argument; below this level, we target the USD 10,750 low; likewise, upside moves that fail at or below USD 12,334 will leave the futures vulnerable to further tests to the downside, above this level, we have a neutral bias. Note: this level has been rejected, making USD 11,251 a key support level. The technical is bearish; however, we have intraday fractal support at USD 11,250; below this level, the futures will create a positive divergence with the RSI, warning that we have the potential to see a momentum slowdown, suggesting caution on intraday breakouts below this level. Bearish, but not considered a technical sell below USD 11,250.

 

Oil

Feb 23 Futures – The futures were moving higher on the back of a positive divergence last week, with price rejecting trend resistance again. Downside moves that hold at or above USD 77.85 will support a near-term bull argument; below this level, we target USD 75.11 in the near term with the potential to trade as low as USD 65.79 in the medium term. Key resistance on the daily technical based on Elliott wave analysis is at USD 89.50; upside moves that fail at or below this level will leave the futures vulnerable to further tests to the downside; above this level, the wave cycle will have a neutral bias. Technically we are bearish with upside moves considered countertrend at this point; Elliott wave analysis would suggest we have a potential downside target at USD 65.79.

 

Iron Ore

Jan 23 Futures – Technically bullish last week, with the futures moving lower on the back of negative divergence, we had concerns that we may miss the USD 115.75 upside target as support levels looked vulnerable. The futures traded back up to a high of USD 112.45, but we have now broken a trend support line, resulting in the futures trading to a low of USD 106.95 this morning. Technically we remain bullish; the low this morning is a warning that the corrective phase is potentially complex on the intraday technical; however, the price is above the daily EMA’s and holding between the intraday support band. Downside moves that hold at or above USD 99,56 will support a bull argument; the technical will have a neutral bias below this level. Technically bullish but in a corrective phase, the 4-hour RSI is above 50 with the stochastic oversold; providing the intraday RSI holds above 50, we remain vulnerable to a test to the upside. The near-term upside target is USD 115.75, with key support at USD 99.56.

 

Steel – US HRC

Jan 23 Futures – Technically bullish last week, we had an intraday negative divergence in play that warned that we could see a momentum slowdown. We have not had a technical pullback, meaning support levels have not been tested; the intraday divergence on the 4-hour chart failed with price trading above our USD 776 level; we have further resistance at USD 796 and USD 822. Although the intraday 4-hour divergence has failed, we still have divergences on the sub-2-hour charts that need to be monitored. Downside moves that hold at or above USD 679 will warn that there is potentially a larger bull cycle in play; below this level, the Elliott wave cycle will have a neutral bias. Technically bullish, we remain cautious of the intraday divergences as they warn we could see a technical pullback soon.

 

Tanker TD3

Jan 23 Futures – Technically bearish last week, with price below all key moving averages supported by the RSI below 50; the moving average on the RSI suggested that resistance levels should hold if tested soon. The futures have moved higher (USD 15.7500) but remain below all key moving averages at this point. The RSI is below 50 (44), with the stochastic in overbought territory (78); momentum is warning that the futures are vulnerable to a test to the downside. However, if the RSI moves above 50, the overbought stochastic is considered less relevant. Technically bearish with upside moves considered countertrend, upside moves that fail at or below USD 19.7916 will leave the futures vulnerable to further tests to the downside; above this level, the technical will have a neutral bias.

 

Coking Coal

Jan 23 Futures – Technically bearish last week with upside moves considered countertrend based on downside move in the RSI, the futures continue to move higher price now trading into the Fibonacci resistance zone. Upside moves that fail at or below USD 303 will leave the futures vulnerable to further tests to the downside; above this level; the technical will have a neutral bias. The RSI is now at 48.5, with the stochastic still in overbought territory; momentum continues to warn that the futures are vulnerable to a test to the downside, providing the RSI remains below 50; if we move above 50, then the overbought stochastic is considered as less relevant. USD 303 remains the key resistance to follow; downside moves below USD 274 will warn that the technical is starting to weaken again.