Returning to the Shippers.

On January 5th, I added 3 companies, all shippers to the short list, HERE'S THE ARTICLE  . The companies included DSX, GNK and NMM. This was based on the normally very volatile Baltic Dry Index, which you can always look up from Trade-Guild.net or this link, showing a quite smooth a direct trend down. Now a lot of this has been blamed on an oversupply of ships ordered years ago as they take time to build, more supply lowers price. However that doesn't account for it all. Economic activity certainly accounts for much of the dip in shipping prices and now with regime change coming about in Egypt with the wild card being the military (who is in Washington right now supposedly giving assurances that they will back the successor to Hosni Mubarak and not exploit the situation to reestablish the military's lost standing) we now have grounds for concern over the control of the Suez and its possible effect on shipping. There's been rumors that Mubarak's son has already fled the country, some strange statements out of Saudi Arabia and a vocal hillary Clinton. Obviously the US and Israel are very concerned with what shape Egypt, as the largest middle eastern country transitions to a new political faction with so many splinter groups and possibly the army all looking out for their best interests. The US badly misjudged the Lebanon situation which gave Syria an iron grip over Lebanon, could the same happen with Egypt?


Here's our picks and how they've fared since January 6th.

 DRY Index-Shipping Prices for Dry Goods...

 DSX a near perfect entry... nearly down 7%

 GNK a perfect entry -23.63%

I had this to say about NMM, "NMM is showing heavy daily distribution in this wedge, the breakouts from wedges can be volatile, so even though I like the trade in this area, I placed the stop up a bit higher to account for that volatility."


As I suspected, there would be a false breakout and that's what we see here. Lesson to be learned here is these common technical patterns nearly always see a false break before they move in the implied direction.

NMM is still in good position for a trade here. GNK really needs a bounce to better it's position and R:R ratio. DSX is not in bad position, although I might phase into this one.

Here are the updated stops for the trades:

 The box is the trending trade stop, the line is the stop if you wish to hold profits and reenter after a potential bounce. Here's DSX which is quite volatile.

 GNK

NMM

I'll be looking at some other opportunities, if you have a chart you'd like analysis on, just email me as usual.