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The information provided in this communication is general in nature only and does not constitute advice in relation to investment products nor
constitute any recommendation on our part. The information has been prepared without taking into account your investment objectives, financial
situation or knowledge and experience. Freight Investor Services Limited is authorised and regulated by the Financial Conduct Authority (FRN
211452).’
Technical Report Global Leader Dry Bulk Derivatives
• Weekly Close US$ 980 ¼
• RSI 44
• MACD Bearish, the histogram is flattening
• S1 US$ 943 ¼
• S2 US$ 937
• R1 US$ 977 ¾
• R2 US$ 985
Verdict – Longer term momentum remains neutral, whilst the
shorter period stochastic is starting to show a bearish cross in an
oversold condition.
The technical range remains intact. Last week’s candle failed to
break the current resistance levels; intra week movements have
traded in the resistance zone, however the weekly close remains
below it.
We continue to see support on the 50 period MA and this is looking
more and more like a key indicator at this point.
Close above the US$ 985 level would suggest the bulls are gaining
control. If US$ 990 remains the high on the current weekly candle
this will become the next technical buy level.
A close below US$ 937 would have technical bearish implications
going forward.
Source Bloomberg
Soybeans November 16 - Weekly Soybeans November 16 - Daily
• Daily Close US$ 964 ¼
• RSI 41
• MACD Bearish , the histogram is flat
• S1 US$ 943
• S2 US$ 937
• R1 US$ 967 13/16
• R2 US$ 990
Verdict – The bullish three river morning star candlestick pattern that we
mentioned last week in conjunction with the oversold shorter period
momentum has resulted in a push back up to the technical resistance levels.
The break above the US$ 972 5/8 failed to hold as shorter period momentum
became overbought on the 20 period moving average, resulting in a failed break
out and a close back below the trend resistance line.
Shorter term momentum would suggest that we could once again try the
support zone of US$ 943 – US$937. A close below this zone would be regarded
as technically bearish from here.
Technical buyers should now be waiting for a close above R2 US$ 990 as this is
the recent pivot high.
Caution on any technical breakout if momentum is failing to make a new
high/low with the price action as this would suggest a bull/bear divergence is in
play and would suggest a false breakout in the market.
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Technical Report Global Leader Dry Bulk Derivatives
‘Risk Disclosure: Trading derivative products such as swaps, futures and options carries with it a substantial risk of loss. Transactional fees such
as broker commission and clearing costs will be applied and these can vary depending on the type of product traded as well as the venue used
for execution. These products are not suitable for all investors. For any further information or to discuss the use of these products please speak
to your broker or relationship manager.’
Soybeans November 17 - Weekly Soybeans November 17 - Daily
Source Bloomberg
• Weekly Close US$ 947 ¾
• RSI 49
• MACD Bearish, the histogram is narrowing
• S1 US$ 912
• S2 US$ 903 ½
• R1 US$ 953 ¾
• R2 US$ 956 ¾
Verdict – A vert similar picture to the November 16 weekly chart,
having seen a test a rejection on the downside due to the bullish
hammer and positive momentum we failed to close above the
technical resistance level of US$ 953 ¾ level highlighted last week.
Longer term momentum remains bullish, though it is now starting
to level out. However shorter term momentum is now starting to
turn and could signal a further test of the downside support going
forward.
At this point the market remains range bound and neutral because
of it. Technical sellers will need to see a close below US$ 912 before
entering the market, but would need to be cautious of further
support at US$ 903 ¼.
For technical buyers US$956 ¾ remains the key breakout level, and
a close on the weekly chart is needed above here before entering
the market.
• Daily Close US$ 9242 ¼
• RSI 50
• MACD Bullish , the histogram is flat
• S1 US$ 929 11/16
• S2 US$ 917 ¼
• R1 US$ 955
• R2 US$ 956 ¾
Verdict – The bullish technical pattern from last week in conjunction with
the shorter period momentum that we highlighted last week resulted in an
upward push through the technical resistance levels of US$ 932 and US$
937 ½.
The technical resistance that we highlighted on the chart last week at US$
955 has held, with US$ 955 being the current high.
The November 17 contract is making new high lows, but failing at this point
to make new highs. The shorter period momentum is looking overbought;
however the longer period momentum is now starting to turn higher. This
would suggest that any pullback is likely to be into support and we highlight
the 200 period moving average at US$ 929 11/16 as being a key level here.
Technical buyers will need to see a close above US$ 955 before entering
the market, whereas sellers will need confirmation below US$ 913
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Technical Report Global Leader Dry Bulk Derivatives
‘Risk Disclosure: Trading derivative products such as swaps, futures and options carries with it a substantial risk of loss. Transactional fees such
as broker commission and clearing costs will be applied and these can vary depending on the type of product traded as well as the venue used
for execution. These products are not suitable for all investors. For any further information or to discuss the use of these products please speak
to your broker or relationship manager.’
Corn December 16 - Weekly Corn December 16 - Daily
• Weekly Close US$ 341
• RSI 39
• MACD Bearish, the histogram is narrowing
• S1 US$ 325 3/8
• S2 US$ 314 ¾
• R1 US$ 364
• R2 US$ 390
Verdict – Short covering continues to be the order of the day on
the Dec 16 weekly chart as open interest continues to drop.
Last week we noted that we had the bullish hammer off a support
level on higher volume with shorter period momentum turning
bullish.
This all suggested higher prices should follow, and this has been
the case. However we highlighted the need for the next upward
move to bee on high volume, and unfortunately this is not the
case, and would suggest that it is lack of selling pressure rather
than buying pressure that is currently pushing the market higher.
The market has now based and US$ 364 would be the next target
in any upward move. A close above US$ 344 ¼ is now needed to
convince technical buyers that we have the potential to go higher.
A close below US$ 314 ¾ would have bearish implications going
forward.
• Daily Close US$ 339 ½
• RSI 43
• MACD neutral
• S1 US$ 322 ½
• S2 US$ 314 ¾
• R1 US$ 346
• R2 US$ 380
Verdict – Technically we looked short term bullish and this has been the
case. US$ 937 ½ was achieved, however we once again have failed to
break above the previous range resistance.
Longer term momentum is starting to turn upwards, however at 17 the
%D remains in bearish territory and bulls should be holding off at this
point.
Shorter term momentum has now crossed to the downside off the
resistance level on higher volume, and this would indicated that the
bears are willing to defend this area and highlight the importance of the
US$346 level.
Technically in the short term it looks like we could once again weaken.
We remain in range and US$ 322 ½ remains and important support,
however a new low at US$314 ¾ is now needed to confirm a technical
breakout.
For technical buyers US$ 346 remain key, and until this level is broken
bulls should remain on the side-line.
Source Bloomberg
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Technical Report Global Leader Dry Bulk Derivatives
‘Risk Disclosure: Trading derivative products such as swaps, futures and options carries with it a substantial risk of loss. Transactional fees such
as broker commission and clearing costs will be applied and these can vary depending on the type of product traded as well as the venue used
for execution. These products are not suitable for all investors. For any further information or to discuss the use of these products please speak
to your broker or relationship manager.’
Corn December 17 - Weekly Corn December 17 - Daily
Source Bloomberg
• Weekly Close US$ 381 ¼
• RSI 43
• MACD Bearish, the histogram is narrowing
• S1 US$ 364
• S2 US$ 357 ½
• R1 US$ 383
• R2 US$ 386
Verdict –A good week last week on the Dec 17 corn. As
expected we once again tested the upside on bullish shorter
period momentum.
The upward swing on low volume is less convincing,
especially in its failure to break the resistance levels of US$
383 – 386 level which would suggest short covering (based
on open interest drop) rather than genuine buy side interest.
Longer period momentum remains neutral to oversold
whereas the shorter period momentum is currently moving
higher and is now just below the overbought zone.
Technical resistance at US$ 386 is the key level and until
broken buyers based on the longer term weekly chart should
remain on the side-line.
Likewise, with the range being set technical sellers will need
to see close below the recent low of US$ 358 ½ before
entering the market.
• Daily Close US$ 380 ¾
• RSI 54
• MACD Bullish, the histogram is narrowing
• S1 US$ 374 ¾
• S2 US$ 364
• R1 US$ 383
• R2 US$ 386
Verdict – Shorter term momentum has gone from bullish to bearish once
again after a 7 day rally.
Resistance at US$ 383 has held, with the daily chart forming a Doji cross on
high volume. This has bearish implications going forward and highlights the
importance of the resistance levels highlighted.
The recent technical breakout at US$ 373 ¼ will be interesting as we are
now above the 20 period and 50 period moving averages. If we reject this
level going forward it should put R and R2 under pressure. However a close
below it would suggest we should once again try the US$ 364 level.
Shorter period momentum on the higher volume and Doji cross would
suggest the support should be broken. It becomes interesting if it holds as it
means we will be going from short covering to genuine buying interest.
Bullish on a technical close above US$ 386. For the trend to go from neutral
back to bearish we would need to see a close below US$ 359 ½.
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text box anywhere on the page, just drag it.]
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Technical Report Global Leader Dry Bulk Derivatives
‘Risk Disclosure: Trading derivative products such as swaps, futures and options carries with it a substantial risk of loss. Transactional fees such
as broker commission and clearing costs will be applied and these can vary depending on the type of product traded as well as the venue used
for execution. These products are not suitable for all investors. For any further information or to discuss the use of these products please speak
to your broker or relationship manager.’
Chicago Wheat December 16 - Weekly Chicago Wheat December 16 - Daily
• Weekly Close US$ 394 ¾
• RSI 28
• MACD Bearish, the histogram is flat
• S1 US$ 386 ¾
• S2 US$ 372
• R1 US$ 421 ½
• R2 US$ 449 ½
Verdict – very little upward momentum on the weekly chart
last week. More importantly what momentum we had was on
low volume which would suggest that there is no real
conviction in the upward move.
Momentum remains flat and oversold, with the bullish
divergence yet to materialise in any real form.
Technically this market remains bearish with trend resistance
at US$ 421 ½. At this point a break in the trend will not be
enough to signal buying intent, unless on high volume. And
there is a high probability that we could see a rejection from
this level.
Technical buyers will need to see a close above the US$ 449 ½
to suggest that there is upside conviction.
A close below the US$ 386 ¾ level would signal to technical
sellers to once again enter the market.
Point of note, any breakout on the downside will need to be on
very strong volume and increasing open interest, due to the
bullish divergence. Without this to support any breakout fresh
sellers need to be very cautious that they do not walk into a
bull trap.
• Daily Close US$ 409 ¼
• RSI 39
• MACD - Bullish, the histogram is widening
• S1 US$ 386 ¾
• S2 US$ 375
• R1 US$ 421 ½
• R2 US$ 449 ¼
Verdict – yesterdays close was on the highest volume since the
recent market bottom. However the shorter period bearish
momentum cross should have longs on alert that the market could
be about to correct.
There is a positive, the daily chart highlights the recent increase in
open interest on the upward move and this does have bullish
implications. This would also put longer period traders on alert for
the bullish divergence in the weekly chart mentioned.
Based on the increased open interest on the upward move, the
correction that looks imminent should mean the current low will
hold. However the previous range that was broken will now act as a
resistance none suggesting a lot more is needed to convince the
market that sentiment has really changed.
Technically a sell on a close below US$ 386 ¾. From a buying
perspective outside of short period swing trades we would need to
see a close above the resistance zone US$ 426 ½ - US$ 449 ¼.
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text box anywhere on the page, just drag it.]
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Technical Report Global Leader Dry Bulk Derivatives
‘Risk Disclosure: Trading derivative products such as swaps, futures and options carries with it a substantial risk of loss. Transactional fees such
as broker commission and clearing costs will be applied and these can vary depending on the type of product traded as well as the venue used
for execution. These products are not suitable for all investors. For any further information or to discuss the use of these products please speak
to your broker or relationship manager.’
• Weekly Close US$ 487 ¼
• RSI 30
• MACD Bearish, the histogram is narrowing
• S1 US$ 473 1/4
• S2 US$ 435
• R1 US$ 500 ¾
• R2 US$ 534 ¼
Verdict – This is basically the same technical as last week, the
range is broken and we have still have a bullish divergence.
Buy volume is very light at this point and technical bulls, aware of
the resistance zone between US$ 500 ¾ and US$ 534 ¼ should
remain on the side-lines at this point until a new pivot high is
formed and broken, or the range resistance is broken.
Technically a sell below the US$ 473 ½ low, however again
caution on any sell entries due to the bullish divergence that is
currently in play unless the momentum indicator makes fresh
lows, or volume and open interest increase drastically.
• Daily Close US$ 487
• RSI 37
• MACD Bearish, the histogram flat
• S1 US$ 473 ¼
• S2 US$ 466
• R1 US$ 500
• R2 US$ 534 ¼
Verdict – The current upward swing is failing at the shorter period
average at a time that the shorter period momentum is starting to
show a bearish cross.
Recent candle patterns in the form of a hanging man, and a candle
similar to a shooting star (tail needs to be longer) on high volume would
suggest that we are once again going to test the recent lows.
A close above the recent high of US$ 490 ¾ would suggest the bulls are
going to take the market on and try and push back into the resistance
zone of US$ 502 ½ - US$ 519 ½.
A close below the US$ 473 ¼ would be regarded as technically bearish
for the market.
Chicago Wheat December 17 - Weekly Chicago Wheat December 17 - Daily
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text box anywhere on the page, just drag it.]
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Technical Report Global Leader Dry Bulk Derivatives
‘Risk Disclosure: Trading derivative products such as swaps, futures and options carries with it a substantial risk of loss. Transactional fees such
as broker commission and clearing costs will be applied and these can vary depending on the type of product traded as well as the venue used
for execution. These products are not suitable for all investors. For any further information or to discuss the use of these products please speak
to your broker or relationship manager.’
Technical Analysis Glossary
Pivot Point
A point where the market makes a new high or low, before reversing in direction.
Trend Line
A directional line connecting pivot points.
Primary Trend
The main trend line over an extended period of time.
Secondary Trend
Distinct from but within the primary trend. Indicates recent trend.
Support
A previous market low where market participants have been prepared to enter long positions.
Resistance
A previous market high where market participants have been prepared enter short positions.
Range
An area between the support and resistance.
Relative Strength Index (RSI)
A technical momentum indicator that compares the magnitude of recent gains to recent losses in an attempt to determine
overbought and oversold conditions in an asset. The RSI ranges from 0 to 100.Typically speaking, an asset is deemed to be
overbought once the RSI approaches the 70 level, and likewise, as the RSI approaches 30, it is deemed to be oversold.
Fibonacci Retracement
Refers to areas of support or resistance. A Fibonacci retracement shows the potential retracement of a financial asset
relative to the original move in price. A trend line is drawn between two points and then the vertical distance is divided by
key Fibonacci ratios; 23.60%, 38.25%, 50.00%, 61.80% and 100.00%. This tool can also be used as a projection method.
Moving Average Convergence Divergence (MACD)
A trend-following momentum indicator that shows the relationship between two moving averages of prices. The MACD is
calculated by subtracting the 26-day exponential moving average (EMA) from the 12-day EMA. A nine-day EMA of the
MACD, called the "signal line", is then plotted on top of the MACD, functioning as a trigger for buy and sell signals on the
crossover of the two lines. The histogram highlights the narrowing and widening of the two averages acting as an indicator
for slowing or increasing momentum in the market. I.E a flattening or decreasing histogram in an upward market would
suggest that the upward move could soon stall.
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text box anywhere on the page, just drag it.]
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Technical Report Global Leader Dry Bulk Derivatives
‘Risk Disclosure: Trading derivative products such as swaps, futures and options carries with it a substantial risk of loss. Transactional fees such
as broker commission and clearing costs will be applied and these can vary depending on the type of product traded as well as the venue used
for execution. These products are not suitable for all investors. For any further information or to discuss the use of these products please speak
to your broker or relationship manager.’
Award winning broker
In 2015 FIS was named as the best performing inter-dealing broker in Iron Ore swaps and options by Singapore-based SGX
AsiaClear for the third consecutive year.
For More information on this report please contact:
Edward Hutton
Tel: +44(0)20 7090 1121
E-mail [email protected]