BDI technical analysis report-Long Term Trend

Baltic Dry Index 1985-2018

This is a sample technical analysis report for the Baltic Dry Index, from our Seametrix✚  module.

BDI Technical Analysis Report

Market’s Comment:

1) Chart Overview: This Chart shows the price fluctuations of the Baltic Dry Index since 1985. Due to the very long time span shown on our chart, we have used a Logarithmic price scale in order to easier understand and identify the Index’s relative performance throughout the years. 

2) History: As it is clearly seen, the BDI was mainly trending within the range of 1050 to 1750 points, between 1985 and 2003. As of 2003, freights broke the 1750 points, and 5 years later on May 20, 2008, climbed to 11.793 points which is the All Time High for the BDI. Eight years later, on February 11, 2016, the Index reached its All Time Lows of 290 points. 

3) The 1050-1750 range band: The range between ~1050 and ~1750 points was the normal price range of the Index for nearly 20 years (1985-2003). As of 2003, prices climbed over it and only after the crash of 2008 did BDI touch these levels again. The levels between 1050 and 1750 can be considered as the old standards for shipping, and currently BDI is trending within those levels. A convincing breakout above 1750’s (i.e 2-3 weeks over 1750’s), initiates a more bullish market. 

4) Market Profile: The Market Profile tool on the right of the chart shows the density of the trading activity at each level throughout all the years since 1985. The most traded level has been the 1.282 points; note that the more trading activity at some level, the more important support or resistance that level is to be considered. 

5) Indicators:
 The Coppock Indicator shown at the bottom of this chart helps us identify the overall direction/trend of the Index (although with a lag). After the All Time Lows of February 2016, the Coppock indicator entered again in a green zone, confirming the current and valid until now uptrend. 

6) Trend-line: The green colored trendline is a linear trendline, shown as curvy because of the Logarithmic scale used. As long as prices remain over the green trendline, the trend is considered as upward. Should prices fall below the trendline and remain there for over 2-3 weeks, technically the uptrend would be suspended. 

7) Supports and Resistances: 
Support Levels: On the down-side, the support levels are: 1070 (minor support) | 1050 (should act as very strong support) | 950 points | 840 points
Resistance Levels: On the up-side, the resistance levels are 1700 (minor resistance) | 1750 (very strong resistance) | 2100 (strong resistance)

8) Conclusion: The Baltic Dry index is currently in an uptrend since Feb-2016. However, as of the 1st of March 2018, the Baltic Exchange decided to structurally change the weighing of the Index by giving more weight on the Capes and excluding the Handies. That has already affected the behavior of the of the BDI, which on one hand follows the Capes closer now, and on the other hand has started to become more volatile. More details on the current trend are provided in our regularly updated short and medium term reports of Seametrix✚.