Capesize
March Futures – The roll from February to March resulted in the futures gapping higher, from a technical perspective the upside move created by the roll means the technical is considered bullish, as the rolling front month contract traded above the USD 14,750 level. As noted on the morning technical reports, momentum had the potential to become vulnerable to a test to the downside as the faster moving stochastic entered overbought territory, whilst the RSI was around the 50 level. We have seen a technical pullback with the intraday technical currently considered bearish; However corrective moves lower that hold at or above the USD 13,320 level will support a bull argument, below this level the technical will have a neutral bias. The index is around USD 1,000 above the 5-year seasonality value, however based on the same seasonality chart we could see price levelling out over the next 8 to 10 days. The futures are technically bullish but in a corrective phase, key support is at USD 13,320.
Panamax
March Futures – On the last report we had questions about the validity of the Elliott wave cycle due to the lifting of the export ban out of Indonesia. The futures have since rolled meaning the intraday technical is now considered bullish; However, although the RSI is above 50 on the daily chart, the intraday RSI is showing a negative divergence, warning we have the potential to see a technical pullback. Downside moves below USD 21,175 will break fractal support on the daily technical and be considered as bearish. With the futures in the March contract USD 8,171 above the index there is a disparity gap that needs to be closed, we have previously highlighted that the seasonality on the 5-year chart tends to turn at the end of January and this has been the case, as the index is moving higher. If the index fails to produce a strong consecutive upside move soon, then we could see a correction in the technical, if the seasonality chart follows the five-year average and moves around 55% to 56% higher between now and mid-March, then the futures are currently at fair value. It is important to note that the three- and five-years seasonality charts are skewed based on the index move in 2021 and this could give a false expectation of the next move. The technical looks like it could potentially enter a correctly phase soon, if the index moves higher as the technical pulls back then the disparity gap could narrow significantly and very quickly. Technically bullish and vulnerable to a pullback, market buyers will be looking for a technical pullback into a bullish index. Aggressive upside moves on the index will further support a bull argument.
Supramax
March Futures- we have a similar situation in the Supramax as that of the Panamax, having produced a bullish gap after the roll into the March contract has continued to move higher, unlike the Panamax the intraday technical does not have a negative divergence. We do however have the same issue regarding a disparity gap, which is at USD 8,144 above the index, meaning if the index doesn’t move higher soon, we could see some form of technical pullback. The index has started to produce positive figures suggesting the seasonality chart is turning higher, meaning it is now all about the scale of the move, we could have a potentially similar situation to that of the Panamax where market buyers will be looking for a technical pullback into a rising index. Technically bullish, corrective moves lower that hold at or above USD 20,972 will support a bull argument, below this level the daily technical will have a neutral bias. Focus should now be on the disparity between the March contract and the index, as aggressive upside moves in index will support a bullish technical in the futures.
Oil
April futures – From a technical perspective little has changed on our previous view, the Elliott wave cycle remains bullish for this phase and has now traded above our near-term upside targets. However, based on the lower timeframe Elliott wave cycle that started on the 01/02/22 the intraday technical remains bullish. Downside moves should be considered countertrend with a near term-upside target potentially as high as USD 96.05. Corrective moves lower that hold at or above USD 90.05 will support a bull argument, below this level the technical will have a neutral bias, only below USD 88.02 will it be considered as bearish.
Iron Ore
March futures – The end of the Chinese New Year holiday has resulted in the futures trading above the USD 147.25 high, the technical is bullish and in trend. However, the new high has created a negative divergence with the RSI on both the intraday and daily technical. This is not a sell signal, but it is a warning that we have the potential to see a momentum slowdown, divergences can and do fail. Based on our intraday Elliot way cycle using the Williams approach, we have a near term upside target at USD 150.41, upside moves above this level target level the USD 154.56 and USD 159.85 levels. Corrective moves lower that hold at or above the USD 139.69 level will support a bull argument, below this level the futures will have a neutral bias; only, below USD 135.00 is the technical considered bearish.
Steel
March Futures – the role in the March futures has created a disparity gap with the 55-period exponential moving average of around 24%, suggesting the futures could be overextended to the downside. The trend remains technically bearish with the Elliott wave cycle suggesting we are on an extended wave 3, meaning upside moves should be considered as countertrend at this point. Corrective moves higher that fail at or below USD 1,299 remain vulnerable to further test to the downside, above this level the technical will have a neutral bias. Technically bearish with price starting to look overextended to the downside, however our Elliott wave cycle would suggest that upside resistance levels if tested should hold, as this trend still has further room to the downside.
Tanker TD3C
February futures- As noted last week the futures remained technically bearish and in trend with price below all key moving averages, suggesting the 7.3260 and USD 7.0000 support levels could be tested, this has been the case. The futures remain technically bearish and in trend, upside moves that fail at or below USD 7.2085 remain vulnerable to further tests at a downside, about this level the technical will have a neutral bias. Near-term support/targets are now at USD 6.4555 and USD 6.0927. Although technically bearish, the RSI is now showing a positive divergence with price, warning that we have the potential to see a momentum slowdown. A close above USD 6.9037 will warn that momentum is improving based on price, suggesting the USD 7.2085 and USD 7.4570 resistance levels could be tested. technically bearish the divergence will need to be monitored.
Coking Coal
March futures- like the February contract the March futures remain technically bullish and in trend. Elliott wave analysis continues to suggest that the current upside move is a bullish wave 3, indicating corrective moves lower should be considered as countertrend. We have seen a small technical pullback meaning the shorter period moving averages have compressed, however, the longer period averages remain well spaced supporting a bull argument. Fibonacci support is at USD 339, USD 315, and USD 282; corrective moves lower that hold at or above the USD282 level will support a bull argument, below this level the technical will have a neutral bias.